Communication is not another business function; it’s the foundation. To understand why layoffs are accelerating, you must start with messaging. Before you build a product, hire a team, or pitch investors, your message has to be clear. If it’s not, you are setting up confusion that ripples through your company, your workforce and your reputation.

Look at what’s been happening since the pandemic: mass hiring, sweeping layoffs and hype around AI. It’s easy to get caught up in headlines, but what’s missing in most of these conversations is a clear, honest explanation of the why; including how over hiring during periods of low interest rates created a fragile setup. That’s where communication failed and it’s still failing.

Low interest rates led to over-hiring

In 2021 companies across multiple industries started hiring aggressively. On the surface, it looked like innovation and growth; but this was mostly about cheap money. With interest rates at 0 to 0.25%, businesses had access to low-cost capital, which is why they hired big. They staffed up for speculative projects like the metaverse, augmented reality and a few others. But here is what really happened:

  • Companies overextended during a window of cheap capital
  • Now that the economy is tighter, they are cutting back not just on staff, but on risk
  • The layoffs are not about sudden underperformance. They are a course correction from two years of over hiring

Is your organization experiencing a similar pullback? Are you prepared to explain the real drivers behind your workforce changes? If not, the confusion you are seeing inside your organization and others is not random but more of a direct result of communication gaps.

This is not the story most companies are telling and that’s the problem.

AI is a scapegoat, not the real reason

Companies are using AI to justify cost cutting moves they were already planning. It sounds better to say “we are automating” than to admit “we hired too many people when money was cheap.” But the messaging isn’t even consistent with AI. We have heard both:

  • AI will help people do more high-value work
  • AI will replace jobs across the company

Which one does your organization truly believe?, Are you leading with strategy or following the bandwagon narrative? Those are two completely different approaches and when leadership sends mixed messages like that, it creates confusion across the board for employees, investors, and the public.

The fact of the matter is AI still needs humans; we are not at the point where AI operates on its own. It still takes people to train it, refine it and use it responsibly. AI is not taking over, but the fear is real and that’s because the communication has been all over the place.

Message the truth, not the trend

If you are leading a company, here’s what you need to do: stop spinning, start explaining. How you communicate layoffs to employees matters far more than the announcement itself.

This is why messaging is important because messaging is not about hype. It’s about aligning what you say with what’s actually happening inside your company. Before you hire, fire, pivot or announce the next big thing, your communication needs to reflect the facts.

Ask yourself:

  • Have you clearly explained the business case behind your hiring surge?
  • Are you being consistent about why the cuts are happening now?
  • Can employees connect the dots between your statements and their lived reality?
  • Is your layoff communication strategy helping or hurting trust across your workforce?

Here is what good messaging looks like:

  • Be clear about context. Say why the hiring happened. Say why cuts are happening now
  • Be consistent. If you say AI is a tool, don’t turn around and blame it for layoffs
  • Be honest. Over-hiring is a business choice. So is trimming back. Own both
  • Be informed. Communicators need to understand the market to tell the real story

We are in a time where people want transparency. They don’t need fluff. They need the facts explained in plain language, from people who know what they are talking about. When you hide behind automation and buzzwords instead of explaining leadership messaging during layoffs, you create a trust vacuum.

Think about it

AI isn’t replacing workers, poor communication is. If companies keep sending mixed messages and hiding behind buzzwords, trust will keep eroding. The solution is not another rebrand, it’s a reality check. Get the message straight and say what’s really going on. That’s how you build credibility and trust.