Layoff Survivors May Feel Psychological Cost

The ship goes down, and you're one of the lucky few who makes it to a lifeboat. You get out alive, but you're tortured by thoughts of "Why me? Why not someone else?"

It's called "survivor syndrome." Psychologists watch for it in disaster survivors, and it's something companies need to think about when they're planning layoffs.

The first victims of layoffs are obviously the poor souls who lose their jobs. But layoffs can have a profound effect on the surviving employees as well, especially if companies don't handle the transition well.

DaimlerChrysler — one of several companies announcing mass layoffs in recent weeks — is planning to eliminate 26,000 jobs in the three years, 20 percent of its employees. "This is literally rocking the foundation of our work force," says spokeswoman Megan Giles.

Conflicting Emotions

Psychologists and business professors say that survivors of layoffs experience many of the same conflicting emotions as survivors of much greater hardships, such as plane crashes or wars.

"On the one hand you're happy to be alive, a positive emotion," says Columbia Business School professor Joel Brockner, a leading expert on corporate survivor syndrome. "But it's sprinkled in with a heavy dose of negative emotion: 'Maybe it's not over,' 'It could happen to me.'"

Brockner says survivors often feel guilt that they kept their job while others lost theirs. "The more they feel, 'It could have been me,' the greater the guilt," he says.

Be Open and Clear

Human resources experts say it is crucial for companies to reassure surviving employees about their job security. The best way, they agree, is for companies to be as open and frank as possible with their workers before, during and after the layoffs, in order to maintain their trust.

Establishing clear criteria for determining who will be laid off can assuage survivors' guilt, experts say. "We tried to find a way that's objective, not subjective," says DaimlerChrysler's Giles.

If companies don't handle layoffs well, they can end up losing people they want to keep.

One Friday last November, senior managers at a New York dot-com told two department heads that the company was changing its business plan and their entire staffs would be laid off. They wanted the two managers to stay, but told them not to talk to their staff before an announcement that afternoon.

"I was extremely annoyed and upset that I couldn't tell them what happened," recalls one of the department heads. Also angry that management hadn't shared their plans earlier, she quit the company the following Monday — even though management had wanted her to stay. The other department head quit a few weeks later.

The Right Way

In his book The Knowing-Doing Gap, Stanford Business School professor Jeffrey Pfeffer compares layoffs announced by Levi Strauss and Citibank in 1997. He says Levi Strauss did it the right way, by specifying exactly which workers would lose their jobs and explaining clearly why.

Citibank announced that it was laying off 9,000 of its 90,000 employees, but didn't say which jobs would be cut. "Instead of 9,000 people being scared, 90,000 were scared," says Pfeffer. "The Citibank approach is less effective, but unfortunately more common."

DaimlerChrysler is trying to be "exceptionally specific" with its employees about layoff plans, says Giles. Employees get regular updates in the company newspaper and on its internal TV station. "We don't want it to be a big mystery what the company is doing and how it's doing it," she says.

Executives at Bank One, which laid off 5,100 people last year, say their openness with their employees when they made the initial announcement in March paid off. When the company announced more bad news in July that they said would not involve job losses, their employees believed them, says spokesman Thomas Kelly.

Follow the Leader

Gateway, which announced 3,000 job cuts last month, is focusing on training its managers to lead the company through the transition.

"It's often a natural reaction for managers to hole up and not be seen," says Gateway's HR director, David Alexander. "That's the worst thing you can do. You've got to go out and be seen by your employees."

Alexander estimates that after major layoffs around 10 percent of surviving employees are angry and resentful, while 70 percent adopt a "wait-and-see" attitude and do very little. Another 10 percent, he says, are "early adopters" who embrace the changes and see them as an opportunity for creativity.

Gateway is telling its managers to identify the early adopters and reward them publicly to show others that it's OK to start working again.

Psychologist Al Siebert has studied "survivor personalities," the small minority of people whose confidence and character are actually strengthened by extreme adversity. Siebert — whose research was inspired by the combat veterans from the Korean War who trained him when he was an Army paratrooper — has identified suvivor personalities' key trait as resilience.

When advising companies who are downsizing, Siebert encourages managers to be patient with their surviving employees. "They want people to hurry up and get over their emotional loss," he says. Siebert believes that allowing employees to vent their negative feelings about the layoffs is the best way to foster the resilience they need to bounce back.