Preparing Yourself Mentally and Emotionally for Budget Cuts and Layoffs

When being in a position of leadership requires you to do what you don’t want to do

I am writing this at the end of March 2025. Sadly, many of my coaching clients had – and still have – to implement drastic budget cuts and sometimes even layoffs. I had written another blog right before the government started mass layoffs, and I chose not to post it because I didn’t want to look like I was holding a chainsaw, if you see what I mean.

But the problem remains. Many budgets have to be cut, and some people will have to be let go, no matter how much empathy and regret we feel. Obviously, these difficult meetings need to reflect tact and care for employees. But they can’t be avoided. The purpose of this post is to help those of you who struggle emotionally at the thought of having to let go employees, but no longer have a choice.

Keeping things in perspective

When we think about layoffs, we feel terrible for the people who will have to face financial difficulties and have to go through the emotional roller coaster of looking for new jobs. It feels like a betrayal. We tend to forget that employment contracts do not vow to continue “until death do us part”. Jobs do not last forever. When employees leave us because they found higher-paying positions elsewhere, we plan a going-away party and buy a cake. We congratulate them. We don’t make them feel guilty for abandoning us. Why? Because we understand they need to do what is best for their careers and their families. We know it’s not personal. Layoffs feel deeply personal but, in most cases, they aren’t.

Occasionally, budget cuts and layoffs create an opportunity to let go employees who had been under-performing for a long time and failed to improve despite being given every chance and every resource to do so. In that case, it is personal, but it is a logical consequence for those who refused to improve to meet expectations. Firing “problem employees” can be a source of relief after many months or years of frustration. If you are letting go someone who has caused you tremendous anxiety and frustration for years, please don’t feel guilty.

Don’t make it about you

When you are forced to let go employees that you wish you could retain, make sure to do it professionally. Say what you need to say, preserve their dignity, and if you can, provide a generous severance package. Please don’t burden them by complaining about how this makes you feel. It’s not their responsibility to comfort you because you feel bad for firing them! Being overly apologetic isn’t helping anything, and making the meeting longer than it needs to be prolongs discomfort unnecessarily. In some cases, talking too much can also create liability and open doors to frivolous lawsuits so please speak with HR for them to prepare you, if you don’t have much experience with layoffs at your current institution.

Seeing the bigger picture

I know, I know, it’s hard to see past the current circumstances and project into the future. But if you can, please find comfort in knowing that your employees will sooner or later find new roles and compensation. Their next jobs might even be better than what they have now and/or pay better. New work environments will allow them to grow professionally. They may even benefit from finding a valuable mentor, new friends, or other people who can create opportunities for them. If they choose to relocate, a new city might feel like a rebirth! It’s impossible to know now what positive events will unfold, but they are unlimited. The key is to focus on new beginnings instead of clinging to the past. The change in mindset won’t happen over-night but it will happen in time.

Become more self-aware

This incredibly difficult task you have to complete can help you get to know yourself better. If you feel nothing at all, you may want to question if/how your lack of empathy may be hurting professional relationships and employee motivation and engagement, then seek to develop more emotional intelligence by working with a coach.

If you feel too much, it means something hit a nerve. It could be bringing back past experiences where you lost a job or had financial difficulties. Or reminding you of something you witnessed that seemed unjust to you. Whatever it is, it’s time to heal the past.

Or maybe you call yourself a people-pleaser and you are in agony every time you have to do something that will make people unhappy. That is a common pattern to release if you want to be a good leader and be happy.

Or perhaps you hold very strong judgment about your institution’s leadership’s decision-making process. It may be an opportunity to release judgment and seek to understand what you don’t see right now. Or maybe it’s a sign that your value system is not aligned with theirs, and you too should be updating your CV and looking for new job opportunities!

If anything you read in this post was insightful or resonated with you, I strongly encourage you to click here to schedule a complimentary call with me to discuss how we can work together on your professional development or career advancement. I look forward to speaking with you soon.

In the meantime, take a deep breath. Do what you need to do. And don’t be too hard on yourself.  

About the author: Dr. Audrey Reille has empowered thousands of professionals through one-on-one coaching, group coaching, speaking engagements, and online courses. Audrey is the go-to executive coach for leaders in higher education administration. She empowers them to thrive by improving communication, confidence, executive presence, effectiveness reducing stress, optimizing strategies, improving professional relationships, and developing a strong and empowered mindset.