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- CEOs are getting creative with the labels they use for laid-off workers, like "lower-value human capital."
- PR experts said phrases like these can affect a company's long-term success, from hiring to team morale.
- Their biggest suggestion: Don't blame AI for C-suite decisions.
If you've been on the internet in the last week, you may have seen Standard Chartered CEO Bill Winters describing some of his workers as "lower-value human capital."
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On Tuesday, talking about planned layoffs in the bank, he said he was "replacing, in some cases, lower-value human capital with the financial capital and the investment capital we're putting in." He later apologized for the comment.
Winters is one of many CEOs who've had to figure out how to talk about the people they're letting go. Companies across industries have announced layoffs, including Meta, Oracle, General Motors, and Nike. Several of them, such as Cisco, Salesforce, and Atlassian, have specifically cited AI as the reason for the layoffs.
Some, like Cloudflare CEO Matthew Prince, have drawn a sharp contrast between those who get to stay and those who don't. In an opinion piece in The Wall Street Journal released Wednesday, Prince divided his workforce into three buckets: the "builders," the "sellers," and the "measurers." Measurers — the people he's cutting — are middle managers and people who do jobs like internal audit.
Crypto.com CEO Kris Marszalek, while announcing a 12% workforce reduction in March, said the company was letting go of "roles that do not adapt in our new world."
But public relations experts say these words have consequences — and there are ways to improve on the words used at these tough moments.
Stop using earnings call language in real conversations
Phrases like "lower value human capital" belong in earnings calls and board rooms, not outside.
"When companies restructure, the investor audience often drives the messaging — and language like 'lower-value human capital' signals decisiveness to a boardroom while landing like a grenade in the break room," said Michelle Sinning, a principal consultant at Colorado-based Bernstein Crisis Management.
Oliver Ellerton, the managing partner of Singapore-based public relations firm Ellerton & Co., said that in most cases, such labels aren't intended to be cruel, but rather they are just a "communication failure" from someone who never learned how to manage people.
"The tell is simple: when a leader reaches for spreadsheet language to describe human beings, it usually means they never made the jump from running the numbers to leading the people," Ellerton said.
He proposed a simple test on how to check if a layoff announcement is appropriate: "Would you say these exact words to the face of the person they're about? If not, they don't belong in a memo or a press release."
Don't say 'AI made us do it'
C-suite is framing layoffs as an inevitability in the age of AI, and that move will backfire.
Catherine Holt, CEO of the Boston-based marketing consultancy Coologee, said executives find it hard to say out loud that "a specific person, in a specific room, decided that a specific number of people would lose their livelihoods on a specific day."
"So, the vocabulary moves the decision somewhere else. The market did it. The technology did it. The future did it," Hold said.
Holt said that it's important to name the decisions as decisions, not inevitabilities. For example, by saying, "We have decided to restructure these teams because we believe AI will do most of this work within eighteen months, and we would rather make this change now than wait."
Sinning from Bernstein has a similar suggestion: own the decision, and say that a person made the call, not AI.
"The leaders who say so out loud will always fare better than the ones who outsource accountability to an algorithm," Sinning said.
Separate the worker from the role
Attaching labels to people, rather than to the jobs they work in, is a bad strategy.
"Separate the worker from the role. A role becoming obsolete is a real thing. A person becoming obsolete is not, and the language should never imply otherwise," Holt said.
She added that the companies that talk about layoffs empathetically are those who say phrases like "roles we are eliminating" and "people we are working to redeploy or transition with support."
Empathy needs to go further to be genuine, including concrete retrenchment benefits like severance pay, extended health coverage, honest recommendations, and network introductions, she said.
These moves are crucial to companies' long-term success, the PR experts said.
"Reputation travels fast, and these phrases are durable. They don't disappear when the news cycle ends; they become the screenshot, the Glassdoor review, and now the answer an AI gives when someone asks what it's like to work there," Ellerton said.
Eventually, they could lead to weaker recruitment and demoralized teams that stop going the extra mile, he said.
Sinning said there's another big reason such vocabulary could backfire.
"The companies making the loudest claims carry the most exposure if the AI transformation story doesn't unfold as predicted, which is a genuine risk," she said.
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