Here's how CEOs can talk about layoffs without saying 'lower-value human capital,' 3 PR experts say

In the wake of recent layoffs across various industries, including notable names like Meta and Oracle, CEOs are under pressure to communicate these difficult decisions effectively. A recent example is Standard Chartered CEO Bill Winters, who faced backlash for referring to some employees as 'lower-value human capital' during an earnings call. Following public outcry, Winters issued an apology, highlighting the challenges leaders face when discussing workforce reductions. As companies continue to cite AI as a reason for workforce cuts, experts stress the importance of choosing words carefully. Phrases that might resonate in boardrooms can sound harsh and dismissive in personal conversations. Michelle Sinning, a consultant at Bernstein Crisis Management, pointed out that terminology like 'lower-value human capital' may signal decisiveness to investors but can alienate employees. 'When companies restructure, the language used can feel like a grenade in the break room,' she noted. Public relations professionals, like Oliver Ellerton from Ellerton & Co., argue that using clinical language to describe layoffs indicates a disconnect between leadership and the workforce. He suggests a simple test: if a leader wouldn't say the words directly to the affected employee, they should reconsider their messaging. Catherine Holt, CEO of marketing consultancy Coologee, emphasized the need for transparency in decision-making. She criticized leaders who attribute layoffs to external factors like market trends or technology, urging them to take ownership of their choices. Instead of framing layoffs as inevitable, Holt advocates for clear statements about the rationale behind such decisions, including the role of AI in the workforce. Sinning concurs, recommending that leaders explicitly state who is responsible for the layoffs rather than deferring blame to algorithms or market forces. Empathy in communication is crucial; using phrases such as 'roles we are eliminating' rather than labeling individuals fosters a more supportive atmosphere. Additionally, tangible support for affected employees, like severance packages and health benefits, can help maintain a company's reputation and morale. Ellerton cautioned that negative perceptions can linger long after the initial news cycle, affecting recruitment and employee engagement. In an age where AI is reshaping the workforce, executives must navigate the delicate balance of business needs and human impact. The language they choose can significantly influence how these changes are perceived, ultimately impacting the long-term success of their organizations.