Few headlines spark as much public outrage as those announcing mass layoffs alongside record-breaking executive bonuses. It’s a storyline we’ve seen repeatedly, from global corporations to household UK brands: workers are told costs must be cut, yet senior leaders walk away with seven-figure rewards. Critics call it hypocrisy. Executives call it economic necessity. The truth sits somewhere in the uncomfortable middle.
The Business Case: A Cold but Familiar Logic
Boards often argue that bonuses are tied to long-term performance metrics agreed long before layoffs are even discussed. They say that retention of top leadership is essential during periods of instability, and that cutting bonuses could drive key decision-makers away at the worst possible moment.
From a purely financial perspective, they insist it is strategy, not sentiment. Layoffs reduce costs quickly. Bonuses “reward performance”. These decisions rarely happen in the same rooms, even if they land in the same news cycle.
It all makes sense in spreadsheets. But businesses are not run inside spreadsheets.
The Human Cost: Trust Erodes Faster Than Revenue
For employees, the message feels clear: sacrifice is expected from the bottom, not the top. Morale drops. Engagement slips. Loyalty evaporates.
When workers see colleagues lose jobs while executives earn payouts that could fund entire departments, the psychological contract between employer and employee begins to fracture. And once trust is gone, companies pay for it in quieter ways: higher turnover, reduced productivity, reputational damage.
In recruitment, we often see the long tail of these decisions. Candidates remember which companies handled downturns ethically, and which ones didn’t.
Hypocrisy or Structural Problem?
It is easy to blame individuals, but part of the issue lies in how corporate systems are built. Executive pay structures are often locked into long-term incentive plans. Shareholder priorities usually outweigh employee sentiment. Boards are encouraged to reward leadership, even when the optics are terrible.
So is it hypocrisy? Sometimes. But it is also a symptom of governance models that prioritise growth metrics over social responsibility.
A Better Balance Is Possible
Ethical leadership doesn’t mean eliminating bonuses or avoiding tough decisions. It means aligning leadership rewards with the lived reality of the workforce. Companies could:
- Freeze or reduce bonuses during years of layoffs
- Tie executive compensation to employee wellbeing and retention metrics
- Increase transparency around remuneration decisions
- Implement shared-sacrifice models where leadership takes visible pay cuts
- Introduce employee representation on remuneration committees
These steps don't solve every issue, but they show integrity. They also rebuild trust at a time when workers feel increasingly sceptical.
The Bottom Line
Layoffs and bonuses may both be part of business reality, but presenting them side by side without context fuels a sense of moral imbalance. Companies cannot control the economy, but they can control how they respond to it. Fairness, empathy, and transparency go further than any retention scheme.
Because people don’t just judge what a company does. They judge what it chooses to value.