How to Write a Memo Announcing Budget Cuts

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A memo containing the bad news about budget cuts is as stressful for the person who has to write it as is for the employees who receive it. But there are ways to handle crafting the right sort of memo for this unhappy task, and it involves keeping qualities such as tone, directness and empathy in mind. Face the bad news squarely in your memo, explain what happens next, and you will go a long way toward a reasoned acceptance of this negative situation.


Explain what's happening as soon as you can in the memo. Begin with the recognition that the news you're going to deliver is unwelcome. Then lay out the reasons for the budget cuts, and do so in a calm, rational manner.

Describe what the budget cuts mean for employee jobs. That's the biggest question you'll have and you need to address it early on. State what departments in your company will be affected by the cuts, and how many jobs will be on the line.

Avoid using angry, condescending or mocking language anywhere in your memo. Respect your employees by telling the truth, and in a compassionate fashion. But do not apologize or write excessively about how upset you feel. Your employees are likely to see such comments as insincere.

Express interest in feedback. Inform your employees how they can reach you with questions about the budget cuts. Try to anticipate the sorts of questions they will ask, and be prepared to give credible, concise answers.

Thank employees for their time, not only for reading the memo, but for their hard work and commitment on the job. Avoid phony compassion. Instead, show empathy and concern. Give them support by including information in your memo about counseling and other forms of employee assistance that might be available.

Direct the employees to human resources for more information about the budget cuts. While that department should inform employees about arrangements such as severance pay, insurance, and job placement, avoid sending employees there to answer concern-oriented questions. It's your responsibility to make employees feel more at ease, and they should come to you with those questions.

Include any attachments you may have regarding the budget cuts. After signing off your memo with a pledge of availability for any questions, you can also add a postscript that directs readers to charts and other statistical information that backs up the decision to cut the budget. This may help employees better understand the reason for the move.


Head off rumors by writing the memo as soon as is feasible. Rumors about impending bad news can create distracting morale problems that need to be addressed quickly.

Check your memo carefully for any errors of grammar, language or spelling. Mistakes will blemish the serious import of your announcement.