A dramatic shift is happening in workplaces. After numerous high-profile rounds of job cuts last year and more in recent months, many workers feel a growing sense of betrayal from employers. As many CEOs continue with additional rounds of layoffs, enforce strict return-to-office (RTO) mandates, and talk about replacing workers with artificial intelligence, morale continues to worsen.

Experts are calling this period of employer-employee dynamics the Great Betrayal. Unfortunately, this sense of betrayal is shared by employees at workplaces across industries and geographies. Leaders must now address the ripple effects of layoffs and rebuild their cultures before it’s too late. Here are three of the biggest effects of the Great Betrayal—and what leaders can do to repair the damage. 

Workers who survive layoffs struggle with detachment

Many workers who survive layoffs find themselves navigating through organizational malaise in what some have described as a post-layoff fog. They try to make sense of what just happened and ask themselves, “Why were my friends let go?” And “Could I be next?”

It should come as no surprise that workers feel a sense of detachment and distrust as a result. Many feel less engaged at work and have weakened connections to their organizations’ missions.

What’s more, the emotional toll of layoffs has a direct impact on company performance. A Leadership IQ study of more than 4,000 employees who survived layoffs found that 74% reported a decline in productivity, 69% reported a decline in the quality of their company’s product or service, and 87% were less likely to recommend their organization as a great place to work. 

While this negative sentiment can apply to workers of all levels within an organization, some levels see more pronounced effects than others.

Middle managers are overwhelmed and feel less confident 

As part of layoffs and organizational restructurings, many companies removed layers of middle management. The managers who remain have to do more with less. They need to manage more direct reports with smaller budgets and higher expectations from senior leadership to deliver results. On top of it all, middle managers are expected to support frontline employees who are feeling betrayed, fearful, and disconnected from work.

These compounding pressures can have a drastic impact on managers, with the potential for serious follow-on effects for an organization. The recent Glassdoor Employee Confidence Index found that confidence among middle managers dropped to its lowest-ever levels in February.

New employees feel less connected

New employees to an organization are not isolated from the effects of the Great Betrayal either. Many of these workers experienced similar dynamics in their previous companies, and they see the daily news of layoffs and pressures from AI. Therefore, many new employees join a new organization with an inherent skepticism from the outset.

For companies, the bar for successfully integrating new employees has now been set even higher. Organizations need to foster loyalty and connection with new employees who may approach the company with caution and a lack of trust.

Five ways leaders can build back trust 

The Great Betrayal is relentlessly impacting workers with a combination of layoffs, RTO mandates, and threats that AI will replace jobs. Leaders must address these new workforce challenges to earn back the trust of their employees or risk high attrition and low productivity. Here are five steps leaders can take:

1. Refocus on the mission and acknowledge responsibility. First, in the aftermath of organizational changes it’s imperative to refocus your teams on the company’s mission. By emphasizing the core mission, you not only remind employees of the higher purpose but also set a North Star for moving forward.

It’s also important to take responsibility for the changes that have occurred. Be authentic by acknowledging the challenges and demonstrating a commitment to navigating through the times ahead. This sets the foundation for rebuilding trust and connection.

2. Listen and provide transparent responses. If leaders learn anything from the Great Betrayal, it’s that rebuilding and maintaining trust begins with listening to what employees are saying and then providing transparent responses and a clear path forward. While rebuilding trust doesn’t happen overnight, it can be restored by taking specific actions in problem areas.

Start by understanding concerns among employees across all levels and functions of your organization. A variety of formats can work here, from town halls to listening tours to anonymous surveys. You want to help employees feel safe telling you how they are feeling and asking the questions that are on their minds.

Once you hear what they have to say, it’s important to be transparent and honest in how you respond. First, report back what you heard, and then develop an actionable plan forward that you can make measurable progress against. Leaders need to take meaningful and visible actions for employees, and show that those actions are making a difference. It can help to find “quick wins” by addressing immediate problems, and it’s also important to put in place a system of tools that reinforce behaviors for the long term.

3. Clarify goals and expectations. When organizations are in flux—and especially after large layoffs—leaders need to clarify how goals and expectations will change. With fewer people, it’s important to refocus workers on the goals that are most important. Ambiguous or overreaching goals can breed uncertainty or disenchantment. By clearly articulating and communicating a set of goals based on the current resources available, you can start to drive stronger alignment with middle managers and teams across the organization.

Explain the “why” behind strategic objectives, and make sure individual employees understand how they contribute to the collective success. Clear expectations will start to create a shared understanding of what it will take to achieve success, furthering trust with the team.

4. Rebuild team connections. High-performance workplaces have deeply connected and engaged teams, so investments in rebuilding connections after a layoff are essential. Especially given that most layoffs come with new team organization, managers and team members need to spend the time to build understanding at a personal level on these reshaped teams, regardless of whether they are in person, hybrid, or remote.

One key ingredient is creating the space and time for team-building interactions. While it was possible to form connections accidentally when teams were in an office together, leaders need to be more intentional about making time and providing tools to build connections in hybrid and distributed workplaces as well.

5. Equip middle managers to support and develop their teams. Organizations need to do everything possible to help middle managers succeed, particularly because they often have larger scope and more direct reports after layoffs. The better that middle managers are at coaching and developing their teams, the more successful companies will be.

The sentiment of the Great Betrayal in today’s workplaces calls for immediate and thoughtful action from leaders. By acknowledging the depth of the problem, recommitting to the organization’s mission, listening to feedback and responding with transparency, clarifying expectations, fostering genuine connections, and supporting middle managers, companies can begin to mend the fractures caused by layoffs and shifting work dynamics.

Leaders who navigate the path forward with empathy, transparency, and a clear focus on their people will not only rebuild trust but also set their organizations on a path to recovery and sustainable success in an era of uncertainty.