Employee Engagement in Times of Change: How to Maintain Morale During Mergers or Layoffs

When a company announces a merger or layoffs, employees don’t just hear the news—they feel it. Uncertainty spreads, engagement dips, and fear takes hold. How leadership navigates these moments determines whether employees feel abandoned or empowered. Research from Gallup shows that during times of organizational change, employee engagement can drop by as much as 15% if communication and trust aren’t prioritized. The key to maintaining morale? Transparent communication, intentional leadership, and a results-driven culture.

The Ripple Effect of Organizational Change

Mergers and layoffs disrupt more than just organizational charts. They create anxiety, lower productivity, and fuel rumors. According to a study by Gartner, 74% of employees report that they are less effective at work when faced with uncertainty about their job security. The challenge for leaders is to minimize disruption and maximize trust.
Engagement isn’t about ignoring reality—it’s about addressing it head-on. Companies that maintain a culture of accountability, even in tough times, see better retention and stronger business outcomes.

1. Prioritize Transparency Over Reassurance

Employees don’t need empty reassurances; they need clarity. Leaders often make the mistake of withholding information to avoid panic. In reality, silence creates fear. A Harvard Business Review study found that organizations with open communication channels during transitions see a 47% higher employee engagement rate than those that operate in secrecy.

• Be upfront about what’s happening and why.
• Set clear timelines for when employees can expect updates.
• Acknowledge concerns honestly rather than overpromising stability.

A leader’s credibility is built on truth, not spin.

2. Equip Managers to Lead Through Change

Middle managers are the frontline of employee morale. Yet, during mergers or layoffs, they are often left navigating the same uncertainty as their teams.

• Provide training on how to handle difficult conversations.
• Encourage managers to check in with employees one-on-one.
• Give them the tools to reinforce company culture and values.

Gallup’s research shows that 70% of an employee’s engagement is influenced by their direct manager. If managers feel lost, their teams will too.

3. Reinforce a Culture of Accountability

Accountability isn’t about blame—it’s about ownership. When employees feel like they have no control, engagement plummets. Organizations that embed accountability into their culture see stronger resilience during uncertainty.

• Encourage teams to focus on what they can control—performance, collaboration, and innovation.
• Recognize and reward employees who step up despite the challenges.
• Foster a problem-solving mindset rather than a passive one.

When people believe their work still matters, they stay engaged.

4. Protect Employee Well-being

Layoffs and mergers are high-stress events, increasing the risk of burnout. Companies that prioritize mental health during transitions not only maintain engagement but also build long-term loyalty.

• Offer access to mental health resources or counseling.
• Normalize conversations around stress and resilience.
• Provide flexibility in workload and expectations where possible.

According to Glassdoor, companies that openly address employee well-being during change see 35% higher retention rates than those that don’t.

5. Create a Vision for the Future

Even in uncertainty, employees need something to work toward. Leaders should paint a clear picture of what comes next.

• Share how the merger or restructuring aligns with the company’s long-term strategy.
• Provide opportunities for employees to grow into new roles or responsibilities.
• Involve employees in shaping the new culture, giving them a voice in the transition.

Forbes reports that organizations that actively engage employees in shaping change initiatives see a 23% increase in productivity post-transition.
Change doesn’t have to mean disengagement. By prioritizing transparency, equipping managers, fostering accountability, protecting well-being, and setting a future-focused vision, companies can maintain morale—even in the toughest moments. Employee engagement isn’t about keeping people happy all the time—it’s about creating an environment where they feel valued, informed, and empowered to contribute, no matter what’s happening around them.
Organizations that invest in culture during uncertainty don’t just survive—they emerge stronger. Learn more about how culture drives business results at Culture Partners.