How to Announce a Company Closing to Your Staff

Once you've made the painful decision to close your business, it's time to let people know, especially your employees. Announcing the news to your staff, however, doesn't have to be as painful as you might imagine. On the other hand, timing, the language you select, and your reaction to their response are all critical issues that you must consider before making such an announcement.

Here are some tips to help you announce the closing with as little stress as possible:

  • Let them know before they read about it. Surprises are OK if it's your birthday. But finding out that you don't have a job through the grapevine isn't ideal, and reading about it in the morning paper stinks. Don't disclose information to the media before you've informed the people who have contributed to your venture and demonstrated a certain amount of loyalty along the way. Even if your relationships with employees have somewhat soured due to lower sales or unforeseen business circumstances, it's simply unprofessional to discount your staff's feelings at this sensitive and admittedly volatile period. And don't ever believe a reporter who assures you that what you say is "off the record." Nothing is off the record.
  • Clear out the rumor mill. It's stunning how quickly rumors begin when a major change is afoot. Instead of attempting to trace the origin of a rumor, put it to rest by telling the truth. Tracking a rumor is a time-consuming and generally futile exercise; as you're busy trying to find the culprit who started the rumor, it's changing and taking on different forms. It's best to tell people, for instance, that unless they hear it from you (or a trusted colleague — someone on your management team), assume the information is not true.
  • Treat your staff with compassion and respect. Giving your staff bad news might be the least of your worries. Still, you owe them a certain degree of compassion and respect as you prepare to announce the closing of your business. Hopefully, your staff has been loyal and committed, and therefore deserve the courtesy of your loyalty and commitment. That means presenting the facts and resisting the temptation to soften your language at the risk of leaving important questions unanswered. For instance, be prepared to answer questions about health insurance, unused vacation, expense reimbursements, and other issues that are likely to arise.
  • Determine the fate of unfinished projects. Even if you're closing your company down, you could be under contract to complete some or many projects. Make sure you discuss these with the appropriate employees so that they have enough time to complete the work. You'll need to decide, too, if the project will be completed or terminated. Try to do that before announcing the closing.
  • Craft your communications channel. Announcing a company closing to your staff should not take the same form as publicizing the annual picnic. Company events like holiday parties and retreats are easily made known through e-mail. It's quick, efficient, and allows people to keep working. Informing your staff that the company is closing should not occur through an e-mail. You could be branded a coward and any attempts to forestall the makings of a rumor mill will certainly fail.
  • Touch your legal bases. Depending on the size of your business, there might be legal requirements you must fulfill in closing your business. Consult your professional advisors — lawyer, accountant, etc. — early in your decision-making process.
  • If you can help, tell them. As soon as your staff is aware of the company closing, they're likely to focus on their futures. What's next? Will I get a new job? How long will it take me to find a new job? These are just a few of the many questions that will probably go through their minds. Some might wonder if you can help. For instance, will you provide references? Can you call people on their behalf and make some introductions? Including this in your announcement could make the news a little less shocking.

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