Rebuilding Team Culture After Layoffs

Layoffs may happen in an instant, but their impact lingers. Even if your team wasn’t directly affected, they still feel the shift- the sudden silence, the empty chairs, the changed Slack statuses. There’s a before and after. And in the “after,” trust gets tested.

It’s easy to think that if the pink slips are done, the hard part is over. But really, this is when the real leadership work begins.

The Hidden Cost of Layoffs

Let’s call it what it is: layoffs shake people. They shake confidence in leadership, in direction, in job security. A recent Edelman Trust Barometer report found that 69% of employees worry about job loss due to economic downturns or company restructuring. That fear doesn’t go away with an all-hands meeting.

Even high performers may start to pull back. People take fewer risks. They speak up less. Collaboration dips. Productivity might hold steady for a while, but energy changes, and the emotional temperature drops.

What Trust Means Now

Trust isn’t about making everyone feel comfortable. It’s about making people feel safe, even when things are uncertain. That means being honest, consistent, and human in your leadership.

Employees don’t expect perfection. But they do expect answers:

Why did this happen?
How were decisions made?
What’s the plan moving forward?

When leaders sidestep these questions, people fill in the blanks. And those stories are rarely generous. While you may not be able to share the full details due to the confidential nature, share what you can and be open to questions. This reflects empathy and transparency, both essential for building trust.

Let’s Look at Who’s Doing It Right

Airbnb: Transparency in the Toughest Moment

When Airbnb laid off 25% of its workforce in 2020, CEO Brian Chesky didn’t sugarcoat it. He wrote a heartfelt letter explaining the decision in detail, including the financial impacts and how it affected the teams. He even shared what he wished the company had done differently. Employees received support with job placement, benefits, and personal outreach from managers.

It didn’t erase the pain, but it preserved trust. And when Airbnb bounced back, many former employees returned.

Patagonia: People-First Always

While known for avoiding layoffs, Patagonia offers a different lesson: invest in trust before you need it. Their approach to transparency, shared ownership, and purpose-driven leadership means that even in tough seasons, their people stick around.

They’ve shown that when you build a deep reservoir of trust, you don’t have to scramble to repair it.

Rebuilding Starts With the Little Things

You don’t need a flashy playbook to rebuild trust. What matters most is consistency:

- Check in with your team, individually and often
- Acknowledge emotions instead of glossing over them
- Share what you know, and admit what you don’t
- Make space for feedback and act on it
- Demonstrate empathy by listening

And if you’re a leader who wasn’t affected personally, say that. Acknowledge the tension of keeping your seat while others didn’t. That honesty matters.

Don’t Outsource the Hard Conversations

This isn’t just an HR task. Rebuilding trust is everyone’s job, but it starts at the top. That means leaders need to model vulnerability, accountability, and calm. It’s about showing, not telling, that the team still matters.

It’s also about action. If you say you’re prioritizing people, then invest in career development. Share pathways forward. Provide coaching. Celebrate small wins. Provide non-monetary recognition when resources are thin.

Because after layoffs, people aren’t just doing their jobs, they’re watching. They’re asking: Can I still believe in this place?

The Trust You Build Now Is the Culture You Keep Later

Organizations that recover well after layoffs don’t “move on,” they face what’s happened, invite people into the rebuilding, and lead with empathy.

Trust isn’t a line item. It’s the foundation that determines whether your people stay engaged or check out. Whether your best talent grows with you, or quietly starts looking elsewhere.

So yes, the reorg may be over. But the leadership moment? It’s just beginning.