How do I tell my staff the company is struggling without causing panic?

Telling staff that the company is struggling requires careful judgment about timing, honesty, and reassurance. You must balance transparency with avoiding unnecessary panic that could trigger mass resignations and accelerate collapse. The approach depends on how serious the situation is. If you're facing temporary cashflow difficulties but have realistic plans for recovery, you might inform senior management or key staff first, explaining the challenges honestly and the steps being taken to address them, while emphasizing that the situation is being actively managed. This allows them to be part of the solution and prevents damaging rumors. If insolvency is likely and redundancies or formal procedures are imminent, you have both legal and ethical obligations to communicate more widely, though you should seek legal advice about exact timing to ensure compliance with employment law and avoid triggering TUPE or redundancy obligations prematurely. When communicating financial difficulties, be honest but balanced: acknowledge the challenges without catastrophizing, explain what steps management is taking, be clear about what you know and don't know about the future, and commit to keeping staff updated as the situation develops. Avoid making promises you cannot keep—don't guarantee job security if you genuinely don't know whether the business will survive. Frame the conversation around actions rather than just problems: 'We're facing significant cashflow challenges, we've engaged advisers, we're negotiating with creditors, and we're exploring all options to preserve the business and jobs.' If formal insolvency procedures are imminent, staff should be informed shortly before or immediately after the process begins, with clear information about their employment rights, redundancy entitlements, and how to access government support through the Redundancy Payments Service. Throughout any communication, acknowledge the anxiety this news will create and offer to answer questions honestly. Remember that staff will often find out anyway through rumors, supplier comments, or visible signs like creditor pressure, so controlled communication from management is better than uncontrolled speculation. However, you must also protect the business—if you believe that announcing difficulties will cause immediate mass departures that make survival impossible, you may need to balance transparency with timing, particularly if you're actively negotiating rescue financing or sales. In such cases, consult with your insolvency practitioner and employment solicitor about the legally appropriate timing for disclosure. Ultimately, most employees respect honesty and appreciate being treated with dignity even in difficult circumstances, and many will stay to help if they believe management is handling the crisis responsibly. What employees cannot forgive is being blindsided by sudden redundancy with no warning when management knew for months that failure was likely.