The headlines read like a corporate battlefield casualty report. ConocoPhillips is cutting a quarter of its workforce. Salesforce, despite robust profits, continues to shed thousands of jobs. They are not alone; a steady drumbeat of layoffs from Oracle, Dexcom, and countless others signals a new, unsettling norm in the business world. Yet, beneath the grim numbers lies a more strategic question, one that executives are realizing they can no longer ignore: It’s not if you let people go, but how you do it.
For decades, the process of employee termination, offboarding, was relegated to the back office, seen as a dreary administrative task. Today, that “how” has migrated from an HR checklist to the CFO’s balance sheet. The data is unequivocal: Handling departures poorly doesn’t just burn bridges; it burns capital.
The costs of an employee's departure
International studies show that the cost of a single employee’s departure can range from 30% to as high as 200% of their annual salary. These are not abstract figures; they represent the concrete costs of recruiting and retraining, compounded by productivity losses, knowledge drain, and severe disruption to workflows.
The financial hemorrhage is just the beginning. The risks compound when security and legal liabilities enter the frame. Research indicates that a staggering 60% of organizational data breaches originate with departing employees.
In a world where data is the new oil, it’s alarming that in nearly 89% of cases, former employees retain some level of access to company systems and information long after they’ve left. This is a direct threat to data integrity, client trust, and the protection of critical corporate assets.
From there, the legal exposure is immense. Lawsuits alleging procedural flaws in terminations, improper hearings, inadequate notice, and poor record-keeping are among the most common grievances filed in labor courts. This is especially true in high-turnover sectors like logistics, construction, and security, where decentralized management and non-standardized processes create a fertile ground for costly litigation.
Resulting organizational damage
This global phenomenon is reflected acutely in tech hubs like Israel. Intel’s significant local cutbacks, part of a worldwide reorganization, ripple through the ecosystem. We’re seeing a sharp downturn in demand for cross-functional roles in HR, support, and sales, which can be seen as the canaries in the coal mine for any economic slowdown. This isn’t a local problem; it’s a snapshot of a global reality where speed often trumps process, leaving a trail of long-term organizational damage.
Beyond the balance sheets and court filings lies the indelible impact on reputation. According to recent HR industry research, 72% of professionals believe the offboarding experience directly impacts employer branding. Conversely, 62% of employees who undergo a positive exit process would consider returning to the company in the future.
In the transparent court of public opinion, a poorly handled exit creates immediate and often irreversible damage, especially when a single disgruntled post on LinkedIn can unravel years of carefully crafted corporate image overnight.
The conclusion, therefore, is unavoidable. Offboarding must be reframed: It is not a technical chore but a strategic inflection point, sensitive, costly, and fraught with risk. Investing in a structured, dignified process that includes a legal hearing, knowledge transfer, equipment returns, and access revocation is no longer an organizational luxury. It is a critical defense mechanism and, more importantly, a genuine opportunity to protect tangible and intangible assets while maintaining a bridge to future talent.
Ultimately, the way a company says goodbye speaks volumes about its character and its competence. It is more than just closing a spreadsheet or processing an exit form; it is a fundamental test of its values.
In today’s volatile economy, every dollar saved by cutting corners on a proper offboarding will be paid back tenfold in legal fees, security breaches, and the kind of reputational damage that no marketing budget can fix. The signature on a departing employee’s farewell letter is also the signature on the company’s own legacy.
The writer is the CEO of EasyDo.