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Laid off? No, you've been 'simplified'

When it's time to announce layoffs, executives embrace euphemism to soften the blow - to their companies.

By Yi-Wyn Yen, reporter
Last Updated: November 11, 2008: 8:15 AM ET

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Tesla Motors CEO Elon Musk referred to layoffs at the Silicon Valley electric car company as part of a "Special Forces Philosophy."

SAN FRANCISCO (Fortune) -- On his reality show "The Apprentice," Donald Trump plays to the cameras when he tells contestants they're fired. But in the real world, there's no easy way to tell employees they're losing their jobs.

That may explain why executives are doing their best to avoid the L-word when it comes time to deliver the grim news.

Last week, when American Express (AXP, Fortune 500) CEO Kenneth Chenault said the company would slash 7,000 jobs, or 10% of its workforce, he called it part of a "re-engineering plan."

Days later, Fidelity Investment president Rodger Lawson described 1,300 layoffs in a memo to staff as "cost improvement plans."

Experts say executives use opaque jargon to minimize the public relations damage of mass firings.

"When you're about to do something emotionally hot, you use boring language to attract less attention," says Robert Sutton, a professor in organizational behavior at Stanford University.

Bland terms like "reduction in force" "rightsizing," and "streamlining" are also a defense mechanism. "When you're doing something bad to someone, it helps to use vague language to distance yourself," notes Sutton.

Silicon Valley companies seem particularly fond of inventing over-the-top management-speak. In a blog post last month, Tesla Motors CEO Elon Musk referred to a 10% staff cut at the electric car startup as part of a "Special Forces Philosophy."

At eBay (EBAY, Fortune 500), 1,500 job losses in October were a result of an employee "simplification."

Last month Yahoo (YHOO, Fortune 500) CEO Jerry Yang explained in an e-mail to employees that a 10% staff cut was a way for the company "to become more fit."

Explains Sutton: "These companies are in businesses that especially depend on human imagination and creativity. The euphemism may flow as they worry about keeping the talent they have and recruiting when things [eventually] turn good."

The newly unemployed may not appreciate bosses who can't bring themselves to use the F-word - fired - but experts defend the corporate jargon.

Executives want to create an impression that they're in control and are making rational choices, especially during a recession.

"Companies have to reassure the people who are left that there's a plan in place," says Jennifer Chatman, a management professor at the University of California, Berkeley. "People see through what executives say, but what unnerves people the most is believing that nobody has control over anything."

"The most challenging part in this economy is retaining your best people," she adds. "If managers don't have a plan or show that their plans derail easily, their best employees are going to start thinking about other options."

Major rounds of layoffs are happening daily, which means more scripted and measured euphemisms are on the way - everything but the L-word. To top of page

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