Why companies lay off people around the holidays – Mary T. O’Sullivan

By Mary T. O’Sullivan, MSOL, contributing writer on business and leadership

“While a layoff at any time of the year is difficult for workers to absorb, it can be particularly tough during the holidays, when budgets are often stretched thin and job hunting can feel like a fool’s errand.” – Fast Company

While we contemplate the guest list for the annual office party (and its rules) and survive the minefield of the Secret Santa gift swap, there is yet another concern for many workers every December. Aside from piling up debt from overspending and piling on weight from overindulging in food and drink, there is the specter of potential layoffs right around the jolliest time of the year. It doesn’t seem right, and the reasons are inscrutable to most workers, but the bottom line is, in every business, it’s the bottom line.

Since the fourth quarter is the last chance to make that annual report shine, there’s pressure in the C-Suite to mollify venture capital investors, private equity owners, and stockholders by cutting expenses. A 2008 Forbes article reviewed the Bureau of Labor Statistic’s tracking of mass layoffs over the previous 10 years and found that “mass layoffs consistently peaked during December, as managers scrambled to tidy up the books, and during January, as managers scrambled to begin the new year on stronger financial footing.” Also, job cuts in 2022 started rising in August and peaked that November, at a level that was 127 percent higher than in October and 417 percent higher than in November 2021, according to The New Republic.

Because the most expensive asset in any organization is its employees, its “human capital”, ordinarily considered to be crucial to the health and productivity of a company. But many organizations often have creative ways to offset whatever talent voids may be left after a major house cleaning. No matter what loss the organization feels, the toll on the laid off workers is greater. While receiving a pink slip instead of a holiday bonus creates stress, embarrassment, and doubt, it’s not just the paycheck employees lose—it’s a sense of security, pride, and constancy.

Shaking off the feelings of the company’s Grinch mentality isn’t easy, but if the organization has a conscience and an ethical HR staff, the misery of a pre-holiday layoff can be softened. First of all, consider the old quote from the movie, The Godfather, “it’s not personal, it’s just business”. Although it may be hard to grasp, and may hurt deeply, keep in mind, the year-end layoff is tied to business reasons. Some employees may be in the crosshairs due to a merger, acquisition, divestiture, business downturn, or any other purpose, even personal politics. In 49 States, no reason needs to be given, because those 49 States are “at will” employment states. Anyone can be let go for any reason at any time.

More in concert with the holiday spirit, offering benefits to laid off employees can add some cheer to the devastating blow of a job loss at the end of the year. Almost all organizations offer some type of severance package, outplacement centers, tuition reimbursement, training, continued medical coverage, and sick and PTO payouts. If these are not offered, make sure to ask, although employers are under no obligation to make any such offers, unless a union contract is in place. However, most companies are willing to negotiate some sort of severance agreement. Don’t leave money on the table when the kids expect another new iPad or two under the tree.

Regardless of the hit to a company’s reputation, layoffs in Q4 will continue to happen. And with almost 40% of Americans going into debt on shopping and entertaining, end of year layoffs will hit hard. With financial pressures seeming to force the hand of an organization, the end of year timing is insensitive. It creates unnecessary anxiety, robbing people of the season’s expected fun and relaxation.

Layoffs are never pleasant, but using humanity, compassion, and sensitivity can soften the blow. Companies should be transparent and clear in communicating the process to employees. People don’t appreciate unpleasant revelations, so layoffs should never be a surprise. Feelings of betrayal, panic, and confusion spread, and can have dire consequences. By offering company support, people have a better chance of landing on their feet.

As Q4 approaches, employees should be wary. If there is a sense that business is changing, it’s not a bad idea to ask if there is a general sense that the upcoming financials are bleak. If the boss verifies the prevailing suspicions, there’s time to make changes to the celebration. Lift the veil of mystery around Santa and tell the kids he’s not coming this year. Do they really need that cool, trendy new toy? Now there is time to enjoy smaller things. And relish that gift of time by slowing down; remember, even bears hibernate in the winter.

“Getting laid off at any time of year is a harrowing experience, but losing your job before the holidays can turn ‘the most wonderful time of the year’ into a stressful and depressing abyss that feels impossible to navigate.” – Success Magazine

Mary T. O’Sullivan, Master of Science, Organizational Leadership, International Coaching Federation Professional Certified Coach, Society of Human Resource Management, “Senior Certified Professional. Graduate Certificate in Executive and Professional Career Coaching, University of Texas at Dallas.

Member, Beta Gamma Sigma, the International Honor Society. Advanced Studies in Education from Montclair University, SUNY Oswego and Syracuse University. Mary is also a certified Six Sigma Specialist, Contract Specialist, IPT Leader and holds a Certificate in Essentials of Human Resource Management from SHRM.contributing writer, business leadership.