I still remember the day my previous company moved in. They set up shop in the conference room with an outplacement counselor (who should have known better) and proceeded to call over the loudspeaker — one by one — the names of all the people they were laying off. This awful parade lasted an entire morning.

They held no group meeting beforehand communicating who they were, what their goals were, and what the future would hold. No smaller department meetings about all the nuts-and-bolts changes that take place during an acquisition. Nothing.

You might say there really is no good way to break bad news. I disagree — and so do the experts. Hear what they have to say in this month's cover story, beginning on page 24.

“Layoffs are not one-dimensional business decisions, but complex changes that affect people's lives, so how a company communicates a layoff and treats its people will be remembered for a long time,” says Katherine Woodall, principal of Towers Perrin. “Unlike decisions about equipment and inventory that affect your balance sheet, people have memories. The worst thing a company could do is to underestimate the impact of a layoff, especially the emotional toll that it takes on people.”

On the other hand, when it's handled well, even those who are laid off recognize and respect that. At The Martin Agency, a Richmond, Va.-based advertising firm that had to lay off 45 of its 400 employees in February, much of the feedback after the layoffs — even from the people they had let go — was positive. “It could have paralyzed us — but that didn't happen,” reports Joe Birriel, senior vice president of human resources and organizational development.

For those who don't consider the subtleties of the communication process, one bad morning can leave a mark on their company that will last for years — and alienate the very people who are most important to their success.