Beazer Homes USA's announcement that it had laid off 1,000 people—25 percent of its workforce—was unusual among the big publics only in that it gave actual numbers. More quietly and perhaps with less drama, many other builders have been doing the same, resizing their workforces to match the lower sales experienced by most over the past six months. (See “Recent RIFs,” right.)

And job losses stretch beyond the biggest builders. The U.S. Bureau of Labor Statistics reported a net loss of 26,000 jobs in residential specialty trade contractors in October. Since its most recent peak in February, employment in residential specialty trades has fallen by 99,000 jobs, the Bureau reported.

Layoffs are sometimes necessary in business, says John A. Challenger, CEO of Challenger Gray & Christmas, a national outplacement company that also handles layoff logistics. “These are critical events in the life of an organizational community,” he says. “Clearly it is important for these companies to get it right.”

That's especially important in a cyclical industry where you may want to hire the same employees back when the market turns. “It's a volatile industry,” says Challenger. “There are ups and downs. If you treat these people the right way, you create a stronger culture around these very difficult events.”

Allowing the employees as much dignity as possible in the process is key, Challenger continues. That might mean allowing them to come back into the office after hours, supervised, to clean out their desks without having to face co-workers as they walk out the door with cardboard boxes full of personal possessions.

And, while it is important to immediately collect company equipment, there should be provisions to allow them to save contacts from Blackberries and computers before they leave. “They have a right to their Rolodex,” he says.

Sometimes laying off people all at once, as Beazer did, is the right tactic, Challenger says. “If you do it in dribs and drabs, it's very hard to keep morale high and positive. You feel like you could be next,” he explains. “People start to commiserate with their friends who have left, who they feel were ill treated, making [the remaining employees] feel even more separated from the company emotionally.”

Some companies elect to have counselors available to help employees immediately after layoffs “to meet with them to help cushion the shock, to help them think about what they say to their families, to give them some optimism for the future,” says Challenger.

Recent RIFs

  • WCI Communities announced a workforce reduction of 15 percent by year end.
  • Standard Pacific Corp. mentioned a 10 percent layoff rate.
  • Toll Brothers has spoken of two rounds of layoffs but has not said how deep they went.
  • D.R. Horton restructured its organization in October, cutting one regional COO position and realigning two others to reduce costs.
  • Technical Olympic USA's Tony Mon says the company has “reduced our staffing levels to levels that are, we believe, in line with those of companies our size.”