The Lingering Effects of Layoffs and Business Restructuring

How do layoffs and business restructuring affect employees and organizations in the long run? This question has become increasingly pertinent in today’s dynamic business landscape. Kareen Zahr Walsh, a distinguished growth strategist, entrepreneur, business coach, startup advisor, and host of the Your Badass Journey Podcast, emphasizes the significance of addressing the lasting impacts of these events. As companies continue to grapple with the aftermath of layoffs and restructuring, Kareen offers valuable insights and strategies to navigate the emotional and organizational challenges that arise. By acknowledging the emotional toll, recognizing the long-term effects, and implementing supportive measures, leaders can foster resilience and ensure the long-term success of their organizations.

The Emotional Impact of Layoffs and Business Restructuring

According to Kareen Walsh Zahr, losing a job due to layoffs or business restructuring can have far-reaching consequences for the affected employees, as well as for the overall health of the organization. She emphasizes that leaders must recognize the traumatic emotional impact these decisions can have on everyone involved, including the management team responsible for executing the layoffs or business restructuring. Kareen highlights the importance of leaders showing empathy and supporting the remaining employees, as they may also face uncertainty and apprehension about their job security.

The Long-Term Effects of Cycles of Layoffs

Furthermore, Kareen Zahr Walsh sheds light on the long-term effects of cycles of layoffs. She notes that companies often overlook that repeated layoffs, instead of making lean and decisive hiring decisions upfront, can create a series of micro-traumas throughout the organization. This erodes employees’ trust in their job security and raises doubts about the value of their efforts. Kareen identifies this as a contributing factor to the phenomenon known as “quiet quitting,” where employees disengage and question their commitment if they perceive their hard work may eventually lead to termination.

Strategies for Mitigating the Effects

To counteract these detrimental effects, Kareen Zahr Walsh suggests two essential approaches. Firstly, leaders should prioritize transparency and open communication with their teams, honestly explaining the business situation and the reasons behind the layoffs. By involving employees in the decision-making process and soliciting their input on how to move forward, leaders can rebuild trust and make employees feel valued and part of the solution. This transparent approach ensures that employees are better prepared to understand and accept difficult decisions in the future, mitigating potential fractures within the organization.

Secondly, Kareen emphasizes the importance of establishing a trauma response structure for the remaining employees. This entails creating a support system where employees can express their concerns, fears, and aspirations, as well as find ways to reintegrate into their roles. By fostering open dialogue and demonstrating a reciprocal commitment to the well-being of the employees, leaders can regain trust and cultivate a sense of shared purpose within the organization.


Kareen Zahr Walsh’s insights highlight the necessity of addressing the lasting effects of layoffs and business restructuring. By incorporating empathy, transparency, and support into the company’s response, leaders can minimize the negative impact on employees and the overall corporate ecosystem. Kareen’s expertise underscores the importance of valuing and empowering employees during times of change, ultimately contributing to the long-term success and resilience of the organization.