Protecting mental health during retrenchment

In recognition of Mental Health Awareness Week 2025, Careerminds is investigating how HR teams can lead with integrity through periods of uncertainty. As the second in a series of three articles, this time we’re looking at the impact of layoffs on mental health and how HR teams can mitigate that impact. 

Empathetic offboarding can make a significant difference to the mental wellbeing of both impacted employees and those remaining in their role – but it requires buy-in from HR leaders and senior executives. By making an active decision to safeguard mental health, companies can downsize with integrity. 

Retrenchment exercises aren’t fun for anyone. Whether you’re the HR contact delivering the bad news, the employee impacted by job loss, or one of the survivors feeling guilty, insecure, and overworked, everyone is affected in some way. Unfortunately, sometimes retrenchments are a harsh and unavoidable reality of doing business.

The 2024 ASEAN Workplace Wellbeing Report states that “employers in Singapore are falling behind their regional counterparts when it comes to mental health awareness and support,” showing that there’s still a lot of work to be done. Protecting employees during unplanned career transitions is one way of closing this gap.

For employees, losing their job can be an emotionally traumatic event. It can feel personal, and the sense of loss runs deeper than a pay packet – there’s also the loss of colleagues, routine, independence, identity, and self esteem. 

Employees may feel stressed by the idea of having to find a new position unexpectedly, they may feel they need to stay strong for their family, they may be anxious about their financial position. It’s a lot to deal with, before even considering what other problems the employee may be juggling behind the scenes. Caring for a family member, dealing with health issues, or facing relationship problems will all compound the strain they feel. It’s no wonder that redundancy can lead to mental health challenges.

HR has a key role to play during the retrenchment process. They are often the ones breaking the bad news, as well as ensuring that legal processes are followed and effectively managing the process so that it runs smoothly for the business. 

Technically, their role can stop there. However, with an increased focus on mental health over the last few years, and the company reputation to consider, the actual role played by HR goes much further. These teams also play a critical part in supporting employee mental wellness throughout the retrenchment process and beyond. The Ministry of Manpower expects that employers “help affected employees look for alternative jobs in associate companies, other companies, or through outplacement assistance programmes.”

By treating employees with empathy and care, and communicating with openness and transparency, HR teams can show that looking after mental health is as important as a business decision to reduce the headcount. When the company website trumpets business’s values, it’s only right that they are then seen to live those values – not only for the purposes of attracting and retaining staff, but also to show that the company operates with integrity and cares for its employees.  

The way retrenchments are conducted can have repercussions for the business and the employee that extend way past the layoff period. By recognising the psychological impact of a job loss, HR teams can protect the future wellbeing of staff whilst avoiding legal action, protecting the company’s reputation, and acting with integrity. 

With the prevalence of poor mental health in Singapore rising to 17%,  behaving ethically towards employees at this critical time isn’t just a professional courtesy – it’s a psychological necessity. 

Outplacement services can play a major role in mitigating the mental health impact of redundancy. In addition to providing practical assistance, such as CV and LinkedIn profile writing, interview support, and career coaching, many outplacement providers can also offer emotional and psychological support. 

That support can take different forms, from one-to-one coaching through to group sessions, from on-site support to virtual tools, and from limited availability through to 24-hour support until the moment the employee lands a new job. Choosing the right outplacement provider to suit your business involves deciding exactly what level of support you wish to provide. Whoever you select, ensure they have insight into the current job market and can provide metrics that enable you to monitor value. 

While your HR team gets on with managing the retrenchment project, outplacement providers can work one-to-one with your affected employees to ensure the business fulfills its duty of care to its staff. That includes protecting the mental health and wellbeing of those impacted. 

At Careerminds, our coaches work with participants to support them through their career transition. They understand the emotional weight of job loss, delivering our programmes with empathy and structure, building resilience and positive mental health. Coaches focus on keeping participants motivated and moving forward, ensuring a successful and short job search. They also work on building confidence in employees who feel knocked and deflated by a process that can sometimes be taken personally.  

At Careerminds, we don’t take this responsibility lightly, and combine experienced coaches with virtual tools to provide high availability services – wherever the participant is based. What’s more, unlike other providers, we offer outplacement until placement – in other words, we’ll work with your staff for as long as it takes for them to secure meaningful new work. 

Uncertainty caused by unexpected layoffs can increase the likelihood of mental health challenges such as stress, anxiety, depression, grief, low self-esteem, and isolation. While retrenchments may be unavoidable, the impact on staff reaches far beyond the loss of income, so it’s imperative that the process is handled with thought and care. 

Mental Health Awareness Week is the perfect time to re-evaluate your company’s approach to the personal impact of redundancy on its employees. Working with an outplacement service such as Careerminds can go a long way towards mitigating negative mental health impacts. 

If retrenchments are on the cards, show that you take your employees’ mental health seriously by contacting Careerminds today. Find out if we’re the right partner for your business and discover why we have such high engagement rates.

Jen David

Jen is a careers writer and CV specialist, with many years’ experience writing for leading careers platforms and her own business, CV Shed. She loves to support job seekers in progressing their careers, whether they’re looking to step up the ladder, take a sideways move, or change career entirely. She writes attention-grabbing CVs that show off her clients’ expertise and their value to a business, helping them to secure new roles quickly.

Jen also writes SEO blog content on a wide range of careers topics, for clients in the UK, US, Singapore and Australia. She has produced over 300 articles to date and also edits the work of other writers. She maintains her own blog to support job-seekers with up-to-date, best practice information on CVs, LinkedIn profiles and other related topics, and has a book available on Amazon Kindle, How to write a CV for the modern job market.