The public administration is undergoing a major reorganization process; driven by the economic difficulties Romania is facing. On the negotiating table is the dismissal of approximately 13,000 employees—a difficult decision, which those of us in the private sector understand very well. We have been through economic crises, a pandemic, and times when we had to make similar decisions. We have gained experience – both from mistakes and from lessons learned. We hoped that we would not face this situation again, but reality shows us that such moments return every few years.
In a context where the public discourse of some emphasizes enemies, finding someone to blame, and creating divisions between the public and private sectors, between multinational and Romanian companies, we have an antidote: knowledge. More precisely, shared knowledge.
What can we transfer from our experience to decision-makers in public administration? How can we contribute to a more humane, transparent, and responsible process?
Below, we have summarized the most valuable lessons from our experiences and those of our clients, supplemented by over 40 international studies conducted over the past two decades. These analyses cover two of the largest waves of global layoffs: the 2007–2009 economic crisis, which led to the loss of over 60 million jobs, and the COVID-19 pandemic between 2020–2022, which resulted in more than 100 million job losses. The goal? To define a data-driven guide, based on validated practices — to transform these experiences into applicable knowledge that will help leaders make these difficult decisions with wisdom, empathy, and courage.
Let’s define this guide:
- What criteria do we use to decide who keeps their job?
Several studies have investigated the main criteria managers use to make these decisions, aiming to ensure that the organization can continue to perform effectively. One of these studies, Stocker & Colab, 2017, identified the criteria most frequently used in decisions to retain or dismiss employees.
Key criteria (in order of importance):
- Commitment
This is the most important criterion. It reflects the employee’s level of engagement with the organization, the effort they invest in its success and the degree of alignment between personal and organizational values.
- Performance Records
The second most important criterion. This refers to the employee’s past productivity and contribution. Good performance is essential for maintaining the organization’s competitiveness — and in the case of public institutions, for delivering high-quality services to citizens.
- Trust
The third major criterion. It reflects the relationship of trust between the employee and management, including availability, honesty, integrity, and loyalty. Trust implies that the employee will not exploit the organization’s vulnerabilities but will contribute to identifying and correcting them in order to increase its competitiveness and the quality of its results.
Secondary criteria:
- Interpersonal Relationships
The ability to work effectively in a team and maintain constructive relationships with colleagues and superiors. Even though these skills are important, they carry less weight than performance in dismissal decisions.
- Growth Potential
While commonly used, assessing an employee’s future contribution tends to be highly subjective.
- Professional Experience
Experience gained in the field, including in other organizations. It is relevant in recruitment and development, but carries less weight in dismissal decisions compared to current performance.
- What is the impact of dismissals on the organization/institution and on the remaining employees?
- Stress and insecurity
Layoffs increase stress levels and the sense of insecurity among remaining staff. Employees fear further rounds of dismissals and may experience a “loss of resources”, as described by the Conservation of Resources Theory (S.E. Hobfoll, 1989). This amplifies anxiety and undermines the sense of stability.
- Performance decrease
Studies from the COVID-19 period (Y-Tu et al., 2021) have shown that layoffs affect both:
- In-role performance – the fulfillment of tasks in the standard job description.
- Extra-role performance – involvement in additional activities that support colleagues and the organization.
Both types of performance tend to decline when employees feel insecure and demotivated. How can you counteract this? The trust-based relationships that managers build with their teams can significantly mitigate these effects.
- How to communicate layoffs: the role of the Line Manager
The way layoffs are communicated strongly influences employees’ reactions and their perception of the fairness of the process.
- Respect and clear explanations
Treating employees with respect and providing a detailed explanation of the reasons and criteria for dismissal increases the perception of fairness and reduces negative attitudes toward the organization. The explanation must be clear, complete, and transparent.
- Who delivers the news
It is essential that the message be delivered by the direct manager, not by an external consultant. Even if the dismissal strategy is carried out with external resources, they are not involved in direct communication. When the news is delivered by someone outside the organization, employees perceive it as a violation of the “psychological contract” and lose trust in the company/institution.
- Impact on emotions
Respectful treatment by the direct manager reduces anger and te intention to file complaints. A clear explanation helps employees perceive fairness, but it is not enough to eliminate negative emotions – this is why empathy and tone matter significantly.
- Practical recommendations for the management of the organization/institution
- Awareness of dual effects
Managers with similar experience already know that although restructuring is a survival strategy, it comes with hidden costs: increased stress and decreased performance among those who remain. People become restless, irritable, conflicts multiply, and the organization’s focus shifts inward rather than outward (toward the services or products delivered) or toward clients or citizens. The period may be longer or shorter, depending on the management’s approach.
- Reducing employee stress
Public organizations and institutions can implement tailored support programs to help employees cope with anxiety, uncertainty about the future, and family and socio-economic difficulties caused by their new status: unemployed or job seeking.
- Transparency and ethics in decision-making
The criteria for dismissal must be clear, objective, and aligned with the organization’s legitimate interests (commitment, performance, trust), avoiding discrimination or decisions based on personal factors, nepotism, political affiliation, etc.
- Respectful treatment
Even in difficult times, employees must be treated with dignity and respect. Face-to-face communication, clear explanations, and real support (without false promises) are essential.
It is not enough to simply communicate the number of people affected by the layoffs; it is equally important to explain what comes next for them: what options they have, what support we provide, and how we help them remain active so that they do not feel abandoned.
Those most resistant to change are usually employees who have built their careers on influential relationships or momentary opportunities, without consistently taking responsibility for their own development through skills, work ethic, and consistent results. These employees will try to postpone facing reality as much as possible. The greatest challenge lies with them, until they realize that change cannot be avoided.
The major challenge is to support them in accepting change and to guide them toward constructive solutions. Once they realize the process is inevitable, openness emerges for taking responsibility and building a new professional path.
The solutions also stem from the answers to the following questions: What happens next to those who have been laid off? What help do they receive for re-entering the labor market, even reorienting themselves towards areas/industries with higher added value? How can they access government programs that help them build a future in their minds outside the organization/institution they are currently in?
- Communication through the line manager
The news of a layoff should, whenever possible, be delivered by the direct superior. Involving an external agent increases the perception of a breach of the “psychological contract” between the employee and the organization. A scenario in which the mayor, the head of a public institution, or the department manager says, “It’s not my fault, the Government is to blame and is cutting back” or “The board decided on the layoffs, I’m just implementing what others have decided” portrays a leader who defines themselves as lacking competence, power, etc, which increases the insecurity and uncertainty of those who remain. The whole action is a team effort: the first step is to manage the layoffs, and the second – equally important – is to maintain or even improve the performance of the organization/institution.
Times of crisis provide us with a rare opportunity: to build the wings of the airplane while it takes off. We have limited time to act, and the direction is clear—we are taking off, not parking.
- Conclusions
Layoffs are always difficult decisions, whether in the private sector or public administration. They are not just an economic measure, but a complex process with a major impact on people, organizational culture, and long-term performance.
Past experiences—from economic crises and the pandemic—have shown us that the success of a reorganization depends not only on numbers, but also on how decisions are made and communicated. Criteria must be clear and fair, communication must be transparent and empathetic, and support for employees must be genuine and tailored to their needs.
For leaders, such moments are tests of integrity and courage. Responsible leadership means combining data and best practices with humanity and respect for people. Only in this way can we turn a critical situation into an opportunity to strengthen trust and build resilient organizations and institutions capable of regaining the confidence of citizens.
Checklist for a responsible layoff process
- Justification and objectives of the process
- What is the real purpose of the reorganization?
- Have alternatives to layoffs been analyzed (retraining, reassignment, reduction of non-salary costs)?
- Have economic, demographic, or technological conditions changed in such a way that the products or services offered are no longer needed, no longer in demand, or have become redundant?
- Criteria and fairness
- What are the clear and objective criteria for employee selection?
- How is discrimination avoided (age, gender, political affiliation)?
- How will these criteria be communicated to maintain transparency and trust?
- Communication and treatment
- How will the decision be communicated to preserve respect and dignity?
- Who will deliver the message (direct manager or external representative)?
- How will the emotional impact be managed for those laid off and for those who remain?
- Support for reintegration
- What support programs will be offered (career counseling, retraining, outplacement)?
- How will cooperation with the private sector and employment agencies be ensured to facilitate rapid reintegration?
- Is there a monitoring plan to evaluate the effectiveness of reintegration measures?
- Impact and monitoring
- How will the impact on organizational performance be measured after the layoffs?
- What mechanisms are in place to support the morale and productivity of those who remain?
- How will feedback and lessons learned be collected and integrated into future processes?
Article published in Economedia, you can find it here.
