Breaking the Stigma: Acknowledging the Trauma-Organized Framework in Corporate Leadership

From Tik Tok to LinkedIn, social media is abuzz with stories of traumatizing layoffs. Millions of people are witnessing real people being blindsided and left feeling helpless. People are posting videos of getting fired in real time on TikTok. Twitter employees tweeted when they were laid off, exposing the horrific ways they found out. Others are sharing their stories and looking for new employment on LinkedIn. Meanwhile, employees who remain with the company are discovering their co-workers were laid off through social media or by simply no longer finding them on Teams or Slack.

In an age of instant and wide-spread knowledge, companies are providing us a front-row seat to the trauma of layoffs.

However, what is often overlooked is that trauma affects more people than those directly involved in the situation. It also affects the organization as a whole. After layoffs, employees experience fear and helplessness, even as they are expected to take on others’ work, grieve the loss of work friends, and meet even higher performance expectations. Research demonstrates that those who stay with the company have more anxiety and less innovation than prior.

And yet, many organizations continue to resort to layoffs as a cost-cutting measure without fully understanding or acknowledging the long-term implications. Companies want to impress their stockholders, save costs, or clean up staffing redundancies without appreciating the long-term implications to their bottom line.

In fact, studies have shown that companies who perform layoffs are outperformed by companies who don’t downsize for two years afterwards. Layoffs also increase costs in severance packages for those who leave and, shortly after, an increase in other costs due to an increase in voluntary transitions. Lastly, layoffs damage a company's reputation when trying to recruit new talent and in the community at large, particularly when harmful layoffs become viral.

The root cause of these issues are leaders operating from a trauma-organized framework. If trauma is a result of something we are unprepared for or helpless to do anything about, trauma-organized leaders are reactive, avoidant, and rigid. They let their emotions drive their decision-making, dismiss opinions that differ from theirs, and oversimplify complex situations. Some leaders reenact past situations, hoping for a different outcome. Others believe that sticking to the status quo is the best approach.

Effective leadership requires a trauma-informed perspective. Leaders who take a step back and look at the bigger picture are better equipped to make informed decisions that benefit everyone involved. It is essential for leaders to be open-minded, reflective, relational, and collaborative to truly lead teams effectively.

It is apparent that when leaders operate from a trauma framework and lay off their employees, it causes further harm to employee morale, increases costs long-term, and decreases performance. Instead, let's use a trauma-informed approach to build a better future for everyone.