The psychological aftermath of layoffs

Today, layoffs are rarely about an employee’s personal incompetency and rather speaks more about the organisation.

Layoffs, unfortunately, are an inevitable part of corporate work. The phenomenon is particularly common for startups and is currently in the spotlight due to Airlift shutting down its operations in Pakistan, resulting in over 1,300 employees losing work overnight.

This year saw a tumultuous beginning for startups – ranging from crypto to healthcare to enterprises like SaaS (Software as a Service). To keep up with automation and even harder global competition, strategies like episodic restructuring and routine layoffs are not uncommon in the corporate industry. However, the massive damage to the employees is a factor that cannot be ignored, and there have been laws in place to cover this.

In current times, layoffs are rarely about an employee’s personal incompetency and rather speaks more about the organisation. It’s much better understood today in terms of cost reduction and an overall economic slowdown.

However, back in the day, this wasn’t the case. Layoffs were not very frequent, and the loss of work was seen as a personal failure or incompetency in the community. It practically meant the end of a professional journey for many people and companies were not very keen on hiring people who were laid off.

The challenges for the mental health of an unemployed employee today are internal or individual. It’s not much about the stigma associated with loss of a job being correlated to one’s competency. The aftermath of a layoff can best be understood in terms of loss. In current times, it’s the loss of an arena to expertise your competencies and feel better or productive in a capitalist society.

For instance, X, who had been laid off during the first wave of Covid-19, talks about the loss of motivation to get out of bed. His family or friends did not understand his exceptional talents and their sympathy did little to offer him the sense of accomplishment that he used to get from solving problems at work. For him, it wasn’t about solving problems, rather doing it for people who understood the rarity of his skill.

The list of intangible losses like the one X experienced are countless for several employees. Some may feel a sense of uselessness after they are no longer able to provide for their family. For some employees, financial stability ensures emotional stability and in a lot of cases it offers a sense of protection, particularly for women.

Apart from the feelings of grief and loss, for many the hope gets lost and they or their families misinterpret the layoff as a personal failure. This effects overall confidence and initiative to apply for further work. The way forward for laid off employees lies in the usage of coping strategies. Coping strategies are techniques that are employed to overcome a stressful or crisis situation.

The problem-focused coping strategy is best suited for situations where laid off employees like X would experience a cathartic relief by just venting out their frustrations about the situation through whatever medium. They may find the relief in writing about it over social media or simply talking about the feeling of injustice and loss of control to a bunch of people. The solution focused coping strategy would be used when laid off employees need a way forward and need to reboot their overall skills and approach.

In this case, the stressors associated with the layoffs can be managed through a good strategy that may involve polishing the skill set, researching the market and networking with people.

For instance, the laid off employees from Airlift may find hope in emailing the founders of Seed, Series A&B companies globally with low tax on income as a motivating factor for remote international work. They may improve copywriting skills for cold emailing and research at least 70 to 100 early stage companies that raised in last three to five months and are expected to hire.

The emotion-focused coping strategy is often ignored the most. People who have been laid off usually have so much to deal in practical life that they find the emotions to be compartmentalised at best. However, it would actually benefit them to deal with their emotions and resiliently work towards a more positive and strong mindset.

The aforementioned coping strategies prove to be useful for managing the stress associated with layoffs and increase the chances of growth in the future. These strategies also enable an individual to develop resilience for such situations going forward.