I acknowledge that it's rarely pleasant (some people have volunteered for a package and they are thrilled). In fact, it's a miserable thing to do. But here is how you do it to make it as tolerable as possible.
1. When you know layoffs are coming, let the employees know they are coming and what general groups will be effected. (I'm not saying announce that "Everybody under John Doe in Finance--you will be out of here!" I'm saying, announce, "We will be reducing our work force by 2% in Finace, and IS.") This is not without consequences--good and bad. The good consequence that people who are interested in taking a package will come forward and let you know. You are not obligated to make your decisions based on that, but it's certainly helpful. The bad consequence is that some high performers will immediately start looking for a new job and if they find one before people are notified, you may lose some.
2. Give a decent severance package. Please, please, please, offer severance. I know, you aren't legally required to do so (in most cases), but please offer. I suggest a minimum of two weeks of pay for every year of service with 8 weeks minimum. You can have people sign a "General Release" in exchange for the severance. (This is a document that says, essentially, in exchange for this severance payment, I won't sue you.)
3. Tell people one-on-one and have the manager, not HR, be the actual deliverer of bad news. An HR employee should be there, but the message should come from the direct manager. The only exception to this rule is if an entire department is being laid off. Then you can tell them as a group, but only if the entire group is going.
4. Have the notification day be the last day worked. This may seem heartless, but people who know their job is ending in two weeks are bitter and they share their bitterness with their colleagues and it's just bad for morale and increases your risk of being sued.
5. Do notifications in the morning and all as rapidly as possible. Don't let them drag out throughout the day. Notify the people who are being terminated and then hold a meeting with the remaining employees to tell them the layoffs are finished. It stops the paranoia.
6. Allow people the dignity of cleaning out their own desks without a manager or security standing over them. You trusted these people for years, trust them for another hour or two to get their stuff together and even files they may need off their computers. This is a layoff--not termination for cause--so don't treat your employees like criminals. If you have valid fears that someone would do something destructive, then take that into consideration. Otherwise, be nice. I have personally been involved in laying off well over 1000 people and not once has a notified employee done something malicious.
7. Provide information about benefits, severance packages and time lines. Be honest. Tell them what happens if they sign the general release and what happens if they do not. Do not be evasive. Encourage them to speak with their own attorney.
8. Above all, do not follow any of the examples at this link. Here are some samples:
I didn't get it but the guy next to me did. We went out for lunch and when we came back his security pass wouldn't work so I let him through the gate. We passed the boss's office on the way to our desks. He went in and said "I need a new pass. Mine's failed." The boss said "Your pass hasn't failed. You don't work here."
and took the card out of his hand.
I got the boot on a Suday after spending an 80 hour week wrapping up a critical project for my employer. I was in San Francisco, preparing to fly back to Boston. The company I worked for canceled my corporate travel card the prior Friday. When I tried to book a flight back home, I was told that the card was cancelled.
Naturally I called my boss on his mobile phone ans asked what was up. He didn't expect the call, he said that HR was supposed to call me on Friday with the news. I asked my now ex-boss to purchase a return flight with his Traval card in my name at the SF airport. He refused.
I ended up buying a ticket back home with my own money. My ex-employer refused to reimburse the ticket because I had been technically terminated on Friday.
I ened up going to small claims court to get the cost of my plane ticket. My ex-company showed up with a lawyer and were set to dispute a $360 plane ticket. The corporate attourney saw the situation for what it was and said that they would pay my plane ticket, stating that it was a "clerical Error". I still had to pay the court filing fees and court costs. In the end, I got $220 back.