Shalom Lamm on The Truth Behind Layoffs: What Leaders and Employees Need to Understand
In recent years, layoffs have become an all-too-common headline across industries—from tech startups to Fortune 500 giants. With each new wave of job cuts, questions arise: Why now? Was it preventable? Could it have been handled better?
While layoffs are never easy or desirable, entrepreneur Shalom Lamm urges both leaders and workers to look beyond the headlines. Having led businesses through economic downturns, restructurings, and expansions, Lamm offers a balanced perspective on why layoffs happen—and how they can be navigated with transparency and compassion.
“Layoffs aren’t just numbers on a spreadsheet,” Lamm says. “They’re people, families, and futures. But they’re also tied to the hard truths of running a sustainable business.”
In this post, we unpack the realities behind layoffs—from economic pressures and leadership missteps to how companies can handle them with integrity and how employees can prepare for the unexpected.
1. Layoffs Are Often the Result of Long-Term Structural Issues
According to Shalom Lamm, layoffs don’t typically stem from one bad quarter. More often, they reflect deeper structural problems that may have been brewing for months or even years—like unsustainable growth, flawed revenue models, or shifting industry dynamics.
Lamm’s Insight: “When a company expands too quickly without forecasting long-term cash flow, it often leads to overhiring. That mistake isn’t always obvious until the market corrects.”
This pattern is common in high-growth sectors like tech, where optimism and venture capital can temporarily obscure financial fundamentals. But eventually, reality catches up—and leaders are forced to recalibrate.
2. Not All Layoffs Are Financial
While cost-cutting is a primary reason for workforce reductions, Lamm notes that not all layoffs are driven by the financial crisis. Sometimes, they’re tied to strategic pivots, mergers, or the phasing out of outdated departments or technologies.
Example: A company shifting from physical product distribution to digital services may reduce its logistics staff while hiring software engineers.
Lamm’s Take: “Strategic realignment isn’t always about saving money—it’s about positioning for long-term survival. The unfortunate side effect is that some roles become redundant.”
3. Transparency and Timing Matter More Than Spin
One of the most damaging aspects of layoffs isn’t the act itself—it’s the way they’re communicated. Shalom Lamm stresses that how leadership delivers the news reflects the core values of the organization.
Lamm’s Advice: “Don’t hide behind buzzwords. Employees deserve honesty. They’re smart enough to handle the truth.”
Poor communication—especially last-minute emails or cold group video calls—can break employee trust and damage the employer brand. Lamm recommends companies communicate layoffs with clarity, compassion, and a genuine effort to help those affected transition smoothly.
4. The Emotional Toll Is Real—On Both Sides
Layoffs are emotionally charged. For employees, the shock and uncertainty can be overwhelming. But what’s often overlooked is the emotional strain on leadership.
“Letting people go is the worst part of being a leader,” Lamm says. “No one feels good about it. But if it’s handled with empathy and foresight, it can be less devastating.”
Lamm encourages leaders to take time to listen, offer references, and, when possible, provide severance and job placement support.
5. For Employees: Layoffs Don’t Define You
Losing a job can feel like personal failure—but Shalom Lamm reminds employees that layoffs are usually about the business, not the individual.
Lamm’s Perspective: “Some of the most talented people I know were once laid off. It didn’t reflect their ability—it reflected the moment the company was in.”
He urges professionals to treat layoffs as a pivot point. Reflect on strengths, refresh your network, and use the opportunity to pursue roles that align better with long-term goals.
6. How to Build a More Layoff-Resilient Organization
As an entrepreneur, Shalom Lamm believes the best way to avoid layoffs is through proactive business design. That includes:
- Sustainable growth plans
- Cross-training and skill development
- Building a financial buffer
- Encouraging innovation and internal mobility
“Flexibility and foresight reduce the need for reactive decisions,” Lamm notes. “When you build smart, you don’t have to cut in a crisis.”
Final Thoughts: Layoffs Deserve an Honest Conversation
Layoffs are complex. They’re not just a line item or headline—they’re a culmination of strategy, market forces, and human emotion. Shalom Lamm advocates for a more honest, thoughtful conversation around them—one that recognizes the pain but also the potential for growth and reinvention.
Whether you’re a leader making tough calls or an employee affected by one, remember this: the end of one chapter doesn’t mean the end of your story.
