The economic downturn has taken a severe toll on technology firms, with major players making significant cuts to their workforce. According to layoffs.fyi, in the first three months of 2023 alone, technology companies laid off a staggering 166,004 employees, surpassing the total number of tech layoffs in 2022 (164,411 employees).
Amid organizational downsizing and industry change, effective layoff announcements can be the difference between a demoralized workforce and one that is motivated to persevere. Our analysis below compares the psycholinguistic elements of recent layoff memos issued by the CEOs of five global corporations - Google, Meta, Amazon, Disney, and Microsoft. Our findings reveal that some memos are more effective than others; we discuss the implications of such across multiple lenses:
Juggling Audiences: How did CEOs balance assertive messaging for stakeholders with language that acknowledges the emotions of laid-off employees?
Reinforcing Company Culture: How did the CEOs use language to promote a sense of togetherness and reaffirm the organization's commitment to success?
Balancing Reflection and Reform: Which CEOs ruminated on the past, and who focused on the future?
Demonstrating Accountability: What can pronouns show us about which leaders took personal accountability for layoffs?
Juggling Audiences:
Assertive communication with a decisive tone can encourage stakeholders’ confidence in leadership’s ability to make tough decisions and drive change. It also reduces the risk of misinterpretation or delays due to unclear company directives.
Balancing assertiveness with emotionally intelligent messaging is critical to ensure that employees feel valued and supported. To this end, memos should acknowledge the difficult circumstances faced by affected employees and express genuine gratitude for their contributions to the company.
In his memo, Bob Iger (Disney) employed a highly assertive communication style. His confident and straightforward tone likely reflects the immediacy of the required action, given that he initially announced the layoffs during an earnings call in February. His approach was likely intended to reassure employees and stakeholders that the difficult decision to engage in layoffs was made after careful consideration and is crucial for the company's long-term vitality.
Our findings also suggest that Bob Iger (Disney) and Sundar Pichai (Google) exhibited a relatively high degree of emotional awareness in their memos. By incorporating statements such as, “so many of you bring a lifelong passion for Disney to your work here,” and, “the fact that these changes will impact the lives of Googlers weighs heavily on me,” the CEOs communicate a sense of understanding for their employees' situation. In doing so, they take steps to foster empathy.
Reinforcing Company Culture:
By using language that appeals to people's need for connection and a sense of community, CEOs promote a supportive and cohesive organizational culture. This, in turn, increases employees' willingness to embrace change and mitigates some of the negative impacts of layoffs (eg., increased voluntary turnover and lower employee engagement).
Additionally, the use of an achievement-oriented tone to explicitly communicate goals and the corresponding approach to accomplish them is an important component of an effective workforce change strategy. Achievement-oriented communications serve to motivate remaining employees by providing a clear sense of purpose and direction.
Across all analyzed memos, the CEOs’ language reveals high levels of affiliation and achievement drive. In their communications, the CEOs made statements such as, “to those impacted by these reductions…you have made a meaningful difference in a lot of customers’ lives,” and, “every one of us and every team across the company must raise the bar and perform better than the competition to deliver meaningful innovation.” Such findings suggest that the CEOs may have sought to promote a sense of togetherness during layoffs, recognizing the crucial role of collective effort in achieving the company's future objectives.
Balancing Reflection and Reform:
Research suggests that CEOs whose language reflects a focus on both the past and future are better at promoting strategic change. Therefore, CEOs should address past decisions that led to downsizing and provide a clear vision for the future in their layoff memos. This helps reassure employees, investors, and the public that company leaders recognize past failures and are committed to taking the necessary steps to rectify them.
In our evaluation, Andy Jassy (Amazon) and Sundar Pichai (Google) focused more on the past than the future and, thus, directed more attention toward their previous actions than the steps that will be taken to achieve future success. Such an approach may leave stakeholders uncertain about the future direction of the company.
On the other hand, Bob Iger (Disney) and Satya Nadella (Microsoft) focused primarily on the future and, relative to their peers, used less past focused language. Such findings suggest that these CEOs did not elaborate on the events and decisions that led to the layoffs. It’s possible that they intended to avoid dwelling on the past in order to refrain from shifting focus away from the current situation. However, a compassionate layoff communication should include a clear overview of the rationale behind workforce reductions, which entails an explanation of previous leadership decisions.
Though Mark Zuckerberg (Meta) primarily focused on the future, he also focused on the past to a considerable degree. By including statements such as, “I made the decision to significantly increase our investments. Unfortunately, this did not play out the way I expected,” and, “we'll cover the cost of healthcare for people and their families for six months…we'll come out of this downturn stronger and more resilient than ever,” his memo clearly identifies his role in what led to the layoffs, while also discussing what the future holds for both terminated and remaining employees.
Demonstrating Accountability:
Pronoun analysis provides insight into individual and group psychology, especially regarding power dynamics. Studies find that authority figures use higher rates of “we” and lower rates of “I.” For example, CEOs use “we” more than “I” during the unscripted portion of earnings call presentations. There are, however, situations where using higher rates of “I” may not only be appropriate but necessary for high-status people, such as when leaders need to accept responsibility for poor company performance or mismanagement.
In all the analyzed layoff memos, CEOs used more “we” than “I.” In doing so, they maintain an authoritative communication style while conveying a sense of shared responsibility rather than personal responsibility for downsizing. Interestingly, Mark Zuckerberg (Meta) used the highest rates of self-references in his layoff memo and, thus, conveyed a stronger sense of accountability for the impact of his decisions on employees and stakeholders relative to his peers.
The significance of these findings is reinforced by examining how the CEOs expressed the number of terminations they would be making. As seen in the table below, Mark is the only CEO who uses “I” instead of “we” in this context.
What does this tell us?
Poor communication can erode the relationship between leaders, stakeholders, and employees, so leaders must be mindful of the impact their language can have on company morale and culture. It's especially crucial to consider the psychological implications of linguistic choices when writing announcements about organizational change.
In layoff memos:
An assertive and emotionally intelligent tone promotes transparency and helps employees who are negatively impacted by changes feel valued and appreciated.
Affiliative and achievement-oriented language reinforces company culture and rallies employees around a unified sense of purpose.
Reflecting on the past and articulating a strategy for the future better promotes strategic change.
When accepting personal responsibility, it is important for leaders to use "I" instead of "we."
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