When Layoffs Hurt: Healing Beyond the Numbers
Layoffs are headline news again. As of August 2025, U.S. employers announced 85,979 job cuts in a single month, bringing the year-to-date total to more than 800,000, the highest level since the early pandemic (Washington Post, Times of India). The unemployment rate now stands at 4.3%, the highest in nearly four years (BLS). In the first half of the year alone, 10 million people were laid off or discharged, a 3.5% increase over 2024 (USAFacts).
Layoffs may be common in today’s economy, but common does not mean easy.
Layoffs are Trauma in the Workplace
At Indigo Path Collective, we define trauma simply as anything that is difficult to recover from. By that definition, layoffs are traumatic for those who leave, those who stay, and those who have to deliver the message.
For people laid off, the loss of income and identity often sparks stress that can lead to depression, disrupted sleep, or illness. Extended unemployment is linked with worsening long-term health outcomes.
For those who stay, survivor’s guilt, heavier workloads, and fear of being next can create ongoing stress and increase the risk of burnout and stress-related illness.
For leaders who deliver the message, the emotional burden is often overlooked. Feelings of guilt, anxiety, and exhaustion can linger long after the decision.
For organizations, the way layoffs are handled can either strengthen or weaken recovery. When done poorly, companies face reputational damage, declining trust, talent acquisition challenges, and greater difficulty rebuilding.
Recovering from Layoffs
Layoffs should be seen not as an end but as the beginning of a recovery process. Recovery means care for the entire system: the people leaving, the people remaining, and the company as a whole.
In Dr. Jeremy Henderson-Teelucksingh’s newest book, The Human Relations Matrix 2.0, a trauma-informed employee engagement framework is introduced to help organizations navigate disruption and rebuild with resilience.
Here’s how leaders can begin to support those who stay while also helping those who leave:
Lead with clarity and compassion
Communicate what is happening, why it is happening, and how the organization will support people and move forward.Support departing employees
Provide career transition services, networking support, and internal recommendations. Invite former employees into alumni networks, extend short-term wellness benefits if possible, and consider project-based or contract roles that keep doors open.Distribute decisions wisely
Use the four pillars of decision making—Financial, Customer, Processes and Systems, and Talent and Technology—to share responsibility and restore a sense of agency.Apply trauma-informed principles
Safety: predictable processes and respectful communication
Trust: honesty about what is known and unknown
Peer support: normalize help-seeking and mutual aid
Collaboration: co-design workload redistribution
Voice and choice: give employees influence over their work
Cultural responsiveness: acknowledge diverse impacts
Communicate consistently
Create a regular rhythm of updates, listening sessions, and progress reports to bring stability. Name the trauma to tame the trauma.Measure what matters
Track employee and former employee trust, engagement, and wellness, not just financial outcomes. Share results openly to rebuild confidence.
The New Normal
Layoffs will remain part of today’s workplace. The question is whether they create lasting wounds or opportunities for renewal. When companies approach layoffs as a recovery process and support people across all three groups, they can protect health, rebuild trust, and set a foundation for long-term resilience.
