Supporting Mental Health in the Workplace During Layoffs

Companies shouldn’t see layoffs as mere business transactions. Such events are emotionally charged, potentially impacting the mental health of everyone involved. Whether you’re the person being let go or the one left behind, job cuts can trigger anxiety, fear, and uncertainty.

Because May is Mental Health Awareness Month, there’s no better time to explore how to approach these transitions with empathy. Mental health in the workplace deserves special attention, especially during downsizing, when emotions are high and stability is shaken.

From HR leaders to executive teams, everyone has a role in ensuring that workplace decisions don’t harm employee mental health. By incorporating thoughtful offboarding practices and leveraging outplacement, companies can minimize harm and reinforce a culture of support.

A layoff can uproot a person’s sense of identity, stability, and purpose. The sudden loss of routine, income, and community often leads to distress, including symptoms of anxiety, depression, and employee burnout. For many, the aftermath of a layoff, apart from finding a new job, is about rebuilding confidence and emotional resilience.

But it’s not only those being let go who suffer. Remaining employees can experience “layoff survivor sickness”—a mix of relief, remorse, and fear about their own job security. This emotional burden can degrade morale and create a sense of instability, harming mental health.

When layoffs are handled without compassion, they can have long-term effects on company culture and reputation. Mental Health Awareness Month is a good time for organizations to reflect on how their layoff strategies affect both individuals and the broader work environment.

HR professionals sit at the heart of this challenge. While their responsibilities include logistics like severance agreements and compliance, their real impact lies in how they handle the human side of job loss.

Supporting mental health during layoffs starts with clear communication, empathy, and transparency. Employees must be treated with respect, not reduced to a checklist. HR should train managers to deliver difficult news compassionately and make space for emotional reactions.

Beyond the moment of separation, HR teams must also consider the well-being of those who remain. Supporting employee mental health means acknowledging the emotional ripple effects that layoffs create and addressing them head-on.

HR’s role doesn’t stop when an employee walks out the door. It includes providing access to resources that help individuals process the transition, regain confidence, and begin the next phase of their career with dignity. That’s where outplacement comes in.

Outplacement services have evolved far beyond resume reviews and interview tips. Today, they’re a vital form of emotional and psychological support during a vulnerable time.

When done well, outplacement provides structure, clarity, and human connection. It helps employees move from the shock of termination to a place of stability. In this way, it bridges loss and opportunity, the old chapter and the next.

Here’s how outplacement services contribute to mental health in the workplace:

• Reduces emotional trauma: Outplacement services help minimize feelings of fear, anger, and uncertainty that often follow a layoff. By offering structured, immediate support, companies show employees that they are not alone during this major life disruption.
• Provides a safety net: Knowing that expert guidance is available after a layoff gives employees peace of mind. This emotional safety net eases the psychological burden and helps departing and remaining staff to feel more secure and respected.
• Encourages action: Outplacement empowers individuals with clear, actionable steps after job loss. This proactive approach restores confidence, offers direction, and helps to prevent people from feeling stuck or overwhelmed.
• Shortens unemployment periods: With access to coaching, networking tools, and tailored job search strategies, employees can re-enter the workforce faster. Shorter gaps in employment reduce financial stress and help protect mental well-being.

Organizations shouldn’t see outplacement as a “perk.” Through this strategy, they’re signalling that they care about the long-term well-being of their employees, even after they’ve left.

If HR wants to lead with empathy during layoffs, outplacement should be at the center of the strategy. It’s a practical, scalable way to care for employees at a critical moment. Here’s how HR can integrate outplacement into a compassionate offboarding process:

• Introduce outplacement early: Outplacement should be conveyed as an HR strategy, not an afterthought. Let your staff know this option is available when you adopt it, so they feel less anxious knowing they’ll be taken care of if a layoff happens.
• Stay connected with survivors: Don’t overlook the mental health of those who remain. Continue checking in with employees post-layoff to address survivor sickness, reinforce stability, and ensure no one feels forgotten.
• Offer personalized support: Choose outplacement providers that offer coaching tailored to the individual’s goals, role, and experience level. Personalized support leads to more meaningful results and a healthier mindset.
• Reframe outplacement as care: Present outplacement not just as a benefit, but as part of your organization’s broader mental health and wellness strategy. This reinforces your company’s values and commitment to people-first leadership.

Layoffs impact employees’ emotional well-being. Both departing and remaining staff can experience stress, anxiety, and burnout. HR teams must approach these transitions with empathy and care to protect mental health in the workplace.

Outplacement is a key tool for supporting employees through change. It provides emotional reassurance, speeds up job searches, and shows a company’s commitment to mental health awareness and responsible leadership. Careerminds offers modern, people-first outplacement that supports both mental and career health. With a 99% satisfaction rate and 95% placement success, we help companies to navigate layoffs with compassion. Talk to our team to learn more.

Rafael Spuldar

Rafael is a content writer, editor, and strategist with over 20 years of experience working with digital media, marketing agencies, and Tech companies. He started his career as a journalist: his past jobs included some of the world's most renowned media organizations, such as the BBC and Thomson Reuters. After shifting into content marketing, he specialized in B2B content, mainly in the Tech and SaaS industries. In this field, Rafael could leverage his previously acquired skills (as an interviewer, fact-checker, and copy editor) to create compelling, valuable, and performing content pieces for various companies. Rafael is into cinema, music, literature, food, wine, and sports (mainly soccer, tennis, and NBA).