How to Motivate Sales Team During Layoffs: Strategies for Engagement & Performance

Recessions and layoffs are the most stressful times for all companies. While the loss of business and bleak revenue forecasts are the obvious result of economic turmoil, layoffs tend to have a compounding effect that can send the bad situation spiraling further down.

A recent study of over 4000 employees who made it through corporate layoffs discovered that the survivors' employee engagement, quality and productivity took a major blow after the layoffs. Over 74% of the respondents said their productivity had dropped, and 64% said their coworkers' performance had also declined.

Layoffs create uncertainty, disrupt workflows, and can significantly impact employee morale—especially for sales teams that thrive on motivation and momentum. When layoffs occur, the remaining sales reps may experience stress, job insecurity, and decreased engagement, making it difficult to maintain productivity.

This guide explores key strategies to rebuild confidence, foster a positive mindset, and ensure sales success—even in challenging times.

The layoff situations

It's that time of the decade when the music begins to slow down, and the markets panic. This time, the situation got exacerbated by companies over-hiring during the Covid-19 pandemic. The threat of a looming recession by the mid of 2023 or the start of 2024 is also a contributing factor for companies going lean.

Business leaders are cutting costs by pausing or halting services, downsizing the workforce, and squeezing the maximum efficiency out of what they already have. Consequently, fewer people are buying products, and the sales teams are losing leads at an alarming rate.

The psychological impact of layoffs on sales teams

Layoffs don’t just affect those who leave—they directly impact those who stay. Sales reps who survive a layoff often face:

• Increased workload: Fewer reps mean more responsibilities, territories, and quotas.
• Job insecurity: Fear of being next can create anxiety and disengagement.
• Lack of trust in leadership: Unclear communication can cause doubts about company stability.
• Lower morale and motivation: Uncertainty can make staying focused and performing at a high level challenging.

Without strong leadership, clear communication, and a structured motivation plan, these challenges can lead to decreased performance, burnout, and higher turnover rates.

How can leaders motivate their sales team during layoffs

With the groundwork laid for why it's important to keep sales teams motivated, we'll examine how it can be done.

1. Keep your communication plan strong

Clear, honest communication is one of the most effective ways to reduce anxiety and rebuild trust after layoffs. Sales teams must understand why the layoffs happened, what changes to expect, and how the company plans to move forward.

✔ What leadership should do:

• Acknowledge the impact of layoffs on the remaining team.
• Share the company’s recovery plan to show stability and direction.
• Be available for questions—host open forums or one-on-one check-ins.
• Reinforce the team’s value—remind sales reps that their contributions are critical.

Keep communication strong throughout the process and be prepared to answer questions regarding the layoffs, such as who will take over the domain of the laid-off salesperson, how people are chosen for the layoff, their packages and what the future holds for the teams.

2. Continue building sales skills and capacity

During layoffs, sales teams often focus on immediate survival, but it’s also an opportunity to invest in long-term skill-building and capacity development. A strong sales team isn’t just about hitting short-term targets; it’s about being prepared for future challenges.

✔ How to foster skill development during layoffs:

• Provide continuous sales training to strengthen negotiation, objection handling, and closing techniques.
• Encourage cross-functional learning, allowing sales reps to gain insights from marketing, customer success, and operations teams.
• Offer personalized coaching and mentorship to help reps sharpen their skills.

✔ Why it works:

• Boosts morale and confidence, making sales reps feel valued and future-ready.
• Helps sales teams differentiate themselves in a competitive market.
• Builds long-term resilience, ensuring sales reps emerge stronger from difficult times.

3. Address emotional reactions and support remaining employees

Layoffs don’t just affect those who leave; they also have a psychological impact on those who remain. Some employees may feel relieved, while others experience anger, guilt, or anxiety about their own job security.

✔ How to support sales teams emotionally:

• Acknowledge the emotional impact of layoffs and provide space for employees to process changes.
• Offer one-on-one check-ins to address concerns, validate feelings, and provide reassurance.
• Provide mental health resources, including counseling services or resilience training.
• Foster peer support networks to encourage open conversations and mutual support.

✔ Why it works:

• Helps sales reps move through the stages of grief and refocus on work.
• Reduces post-layoff disengagement, ensuring team members stay productive.
• Builds trust and loyalty, preventing unnecessary turnover.

4. Prevent overburdening remaining salespeople

One of the biggest mistakes companies make after layoffs is pushing too much work onto the remaining sales reps. While some redistribution is inevitable, failing to balance workloads properly can lead to burnout, reduced performance, and higher attrition rates.

✔ How to rebalance workloads effectively:

• Prioritize high-impact tasks—focus on the most valuable accounts and leads instead of trying to cover everything.
• Automate repetitive tasks to reduce administrative burdens.
• Reassign leads strategically, considering each rep’s strengths and capacity.
• Introduce team-based collaboration, allowing sales reps to share workloads efficiently.

✔ Why it works:

• Prevents burnout and frustration, keeping reps engaged.
• Ensures high-quality customer interactions instead of rushed, ineffective outreach.
• Helps sales teams adjust smoothly to new team structures.

5. Maintain a human-centered approach to layoffs

How a company handles layoffs can define its culture and impact future retention rates. Sales reps need to feel that their contributions are valued and that the organization cares about their well-being.

✔ How to maintain a human-centered layoff process:

• Communicate openly and with empathy, ensuring employees understand why layoffs happened.
• Provide transition support for departing employees, such as job placement assistance or recommendations.
• Acknowledge the difficulty of the situation and offer time for adjustment.
• Express appreciation for remaining employees, reinforcing their importance to the company’s future.

✔ Why it works:

• Prevents a culture of fear, ensuring sales reps remain engaged and committed.
• Reduces the likelihood of top performers leaving due to dissatisfaction.
• Helps rebuild trust in leadership, keeping morale steady.

6. Provide professional development opportunities

Layoffs often make employees more focused on future-proofing their careers. Sales reps who feel that they are growing professionally are more likely to stay engaged and committed to the company.

✔ How to offer professional growth opportunities:

• Provide sales training in new domains, such as enterprise sales, SaaS, or key account management.
• Bring in industry experts for knowledge-sharing sessions and workshops.
• Offer technical training in CRM systems, data analysis, or digital tools.
• Create internal mobility programs, allowing employees to explore leadership or cross-functional roles.

✔ Why it works:

• Shows that the company invests in its employees’ growth, even during tough times.
• Increases employee retention, as sales reps see a long-term future with the company.
• Improves overall team capabilities, driving better sales performance.

7. Prioritize innovation and engagement

Layoffs often lead to resource constraints and uncertainty, making it essential to foster innovation and keep employees engaged. Encouraging sales teams to think creatively and take ownership of new strategies can turn challenges into opportunities.

✔ How to encourage innovation and engagement:

• Challenge reps to develop new sales techniques or experiment with outreach methods.
• Encourage collaborative problem-solving, giving employees a say in process improvements.
• Offer quick-hit incentives, rewarding small wins that drive performance.
• Use real-time recognition platforms to celebrate creative solutions.

✔ Why it works:

• Gives sales reps a sense of control and empowerment in an uncertain time.
• Keeps engagement levels high, preventing apathy or burnout.
• Helps the company discover new, more efficient sales approaches.

8. Build resilience within sales teams

Resilience is adapting, recovering, and maintaining performance under challenging conditions. Not all employees naturally possess resilience, but it can be cultivated through leadership, coaching, and structured support.

✔ How to strengthen resilience in sales teams:

• Set attainable short-term goals to create a sense of achievement.
• Reinforce growth mindset principles, encouraging reps to view challenges as learning opportunities.
• Provide consistent coaching and feedback, helping employees navigate difficulties.
• Encourage team bonding activities, building a strong support system.

✔ Why it works:

• Helps sales reps stay motivated despite uncertainty.
• Builds a culture of perseverance and problem-solving.
• Ensures sales teams recover quickly from setbacks.

Qualities that can help sales leaders to stay at the top

While motivation keeps your sales reps on their toes during the day, their morale helps them persevere through hardships. Their morale determines their satisfaction and is the condition that shapes their attitude. It's essential to build a team more in ways such as:

1. Effective communication

For effective communication, you must talk to smaller groups of salespeople to show them that they are important and closer to the leadership. Explain the current situation precisely and the rationale behind the decisions. Have a one-to-one talk with all your sales rep to let them know what is expected of them and that they are valued employees.

2. Acknowledgement

Explain to your salespeople that you understand the responsibilities and the additional stress they will undergo in the upcoming weeks and months. Describe your plans to deal with the changes and how you will attempt to prioritize the additional tasks they must take up. Acknowledge the impact of your actions so they understand that you're not treating them like a disposable asset.

3. Empathy

Building on what was said earlier, show empathy with their concerns for the future and those who were let go. Inquire every person regarding how they felt about the layoffs and what specific queries they have. The one-to-one conversation here is to allow employees to vent their thoughts and emotions and get clarity so they do not become susceptible to rumors and false information.

4. Focused attention

While discussing the layoffs and the difficult times ahead, always keep the undertones positive and oriented towards the future. In the short term, the salespeople will face more difficulty landing leads and converting prospects. However, it's also their chance to hone their skills in the toughest times and develop as a salesperson.

5. Supervision

Your sales reps must know that the management-level people are always available to discuss their concerns, questions, performance and the future. They can also interact freely with the management to learn how to overcome their obstacles to success.

6. Appreciation

Show appreciation and sincerely thank all your best salespeople who have kept the business afloat. Express your belief that their association with you is highly valued and their efforts will be well rewarded.

Examples on how big companies managed to stay afloat during layoffs

Here are some examples of how different companies are motivating their employees in the middle of the dynamic job market:

1. boAt Lifestyle

A maker of consumer audio products and wearables, the boat is one of the most popular brands in the world. The company understands that to have an engaged and motivated workforce, their need to feel connected to the mission and purpose of the company.

They have extra hours for employee conversations so the leadership listens to what the employees say.

2. upGrad

upGrad is an online platform for higher education. It provides rigorous industry-relevant training for freshers, experienced workers and even those looking to start new careers. The company keeps their young workforce motivated through appropriate challenges and innovative peer-to-peer learning processes rather than regular training.

They believe visibility into the space of opportunity for fulfilling work is key to retaining their talent. Building strong communication with the employees is also their mode of motivation.

Empowering sales teams with Compass: Motivation beyond the numbers

In times of uncertainty, sales reps need more than just motivation—they need clarity, transparency, and confidence in their earnings. Layoffs can create doubt and disengagement, making it essential to have a system that keeps sales teams focused, rewarded, and driven. That’s where Compass comes in.

Compass isn’t just another sales performance tool—it’s a game-changer for keeping sales reps engaged and productive, even during difficult times.

• ✔ Automated commission tracking: No more confusion or disputes over payouts. Reps see their earnings in real time, keeping them motivated to close deals.
• ✔ AI-powered nudges: Timely reminders and performance insights help sales teams stay on track and identify opportunities to maximize their earnings.
• ✔ Gamified leaderboards & incentives: Healthy competition fuels engagement, pushing reps to hit milestones, outperform targets, and stay focused on results.
• ✔ Seamless integration with sales tools: No extra admin work—Compass connects with your CRM, so reps spend more time selling and tracking numbers less.

💡 Motivation isn’t just about rewards—trust, transparency, and giving sales teams the tools they need to succeed. With Compass, sales reps stay engaged, confident, and performance-driven—even in times of change.

Want to keep your sales team motivated and performing at their best? Try Compass today!

Conclusion

Layoffs create significant challenges, but strategic leadership, transparent communication, and employee-focused initiatives can keep sales teams motivated, engaged, and productive.

✔ Support skill development to build long-term sales capacity.✔ Address emotional reactions to rebuild morale and trust.✔ Balance workloads to prevent burnout.✔ Offer professional growth opportunities to keep reps invested.✔ Foster innovation and engagement to maintain high energy levels.✔ Strengthen resilience to help sales teams adapt and thrive.

By implementing these strategies, businesses can retain top sales talent, drive revenue, and create a stronger, more motivated team—even in challenging times.