Chances are you know someone who has recently been laid off, outsized, right-sized, merged, axed, reengineered, or (my favorite) "repositioned out of the company". In October businesses slashed 415,000 jobs, the worst monthly cut in payrolls since May 1980. The unemployment rate has jumped to 5.4 percent- the highest since December 1996.

Businesses who have been downsizing are starting to suffer. Workers who survive layoffs watch as the exiled hang their heads, clean out their desks, and slowly trudge out the front doors. Employees who remain are left feeling shaken, disillusioned, and wondering, "Will I be one of the next wave of casualties?" Resumes are updated and productivity plummets as workers spend time and energy worrying about their future and searching the web for their next job. If the layoffs were not handled well, the survivors may become covertly or overtly hostile.

What do you say to an employee who will not look you in the eye as they pass you in the hallway? How can you focus these hesitant workers? How do you motivate the survivors?

Without question the best way to handle the fallout from layoffs is to avoid layoffs completely. To avoid them implement one of the following ideas: pay cuts for all employees, an enforced day off every two weeks without pay (studies show that 85% of workers want to spend more time with their families) or ask the group that will be laid off how they can generate enough income to save their jobs. This strategy worked for a group that developed a new service, saved their jobs, and eventually spun off to create their own company.

If you can't avoid the layoff it's time to have the tough conversation with the members of your team. They will want to know the forces that will be affecting their lives so directly. Share the background reasoning that led to the decision; give clear, relevant reasons to your staff to support the decision to reduce head count.

Involve them in the "who goes" decision as much as possible. Talk with each employee individually. Discuss their future career plans with them. Some are more willing to leave or be assigned to other groups than others. Do you have any contacts in other companies that you can offer this person? Let them plead their case, convince you of their value, show you their contribution to the bottom line. They may give you information that you didn't know. I've even seen employees convince themselves that they aught to be one of the first ones fired (this takes a lot of responsibility off your shoulders). Use this opportunity to oust workers who have attitude problems and employees who are not performing well.

Recognize openly that this is a tough, painful experience. Discuss your experiences of the process. Share how you are feeling about it. Honor those that are being laid off. Do anything you can to symbolically recognize the work, results, or achievements of those who are being laid off. You may want to do this in a large meeting or with each person individually.

Once the employees who were laid off have removed their personal effects, left the work site, and enough time has past to allow for processing emotions, you must start to refocus your team. Clarify the new direction and future vision for your group. Paint a picture with words. What are you trying to create? Why does the group exist? Define clear long-range outcomes the group can work toward.

Involve the members of the group in articulating the path you will walk down. Have them set short-range goals, budgets, strategies, and milestones that you will use to measure your success. Don't expect enthusiasm to show up quickly. It often takes months to get back up to peak levels of productivity following layoffs.

Assist your team in getting to know each other at a deep level quickly. Use personality assessments, team building activities, or anything else you can devise so members share their personal strengths, gifts, and challenges relative to your team. This can shave months off your delivery time.

Assist your work team as they identify and divvy up the responsibilities. If things have been dysfunctional, now is the time to redesign systems and workflow if you can do so quickly. As people leave an organization they take their skills and knowledge with them. Identify missing skill sets and knowledge that you will have to develop or bring in from external sources. Encourage employees to be frank with you about what responsibilities they can handle well and what responsibilities will burn them out. They may be fearful of this process as they realize that their jobs may also be on the chopping block.

Know that a time of uncertainty and chaos will follow layoffs as people work out relationships and negotiate power. Be steady through the storm. Clarify the future direction with your group every week or two. Be willing to listen to their frustrations without taking them personally and remember that change is hard for people to go through.

Refocus on the value that you provide your customer. You may have typical customers outside your organization or your customers may be people within your organization that use the service or product you provide. Refocus on what they want, on listening intently to their feedback, meeting their specific needs.

Train your managers well! I talked with a manager from Agilent Technologies just after they had layoffs. He was well trained to handle his own stress and the behaviors from his staff. He said, "I wouldn't know what do to in some of the situations I faced. The training I received made it a smooth transition."

A majority of workers, in every income bracket in America, live paycheck to paycheck. They have no cushion of funds in their bank accounts. When these workers loose their jobs they often panic, feel fear for their basic needs, and become indignant, aggressive, or depressed. Layoffs can be a devastating event for people and organizations. Humans seem to have the amazing ability to grow stronger, to develop trust, to become more resilient through adversity. A group that struggles and survives shares a bond that can't be bought at any price.

Layoffs can try your strength as a leader. They can test your resolve, push your management skills to the edge, and force you to question your basic values. Stay with your core beliefs, they will see you through the hard times. Strong leadership through the pain and discomfort of layoffs can catalyze a dysfunctional organization, turn a company around, and form a fractured group into a focused, energized, high performing unit. It is my hope that your group becomes stronger and develops more resolve as they heal.