How Associations Can Handle Workforce Reduction in Uncertain Times

How Associations Can Handle Workforce Reduction in Uncertain Times

According to an article by Mark Athitakis in Associations Now, the economic uncertainty that defined 2025 continues to affect associations as they head into 2026. The article cites Holly E. Peterson, Esq., counsel at Tenenbaum Law Group, who noted that nonprofits are already seeking legal guidance as grant funding disappears or federal policy changes disrupt ongoing initiatives. That financial strain is pushing some leaders to consider a workforce reduction, but the path forward requires discipline rather than reactive decisions.

Peterson cautioned that leaders should not label terminations for performance as a “reduction in force” or “reorganization.” Mischaracterizing the reason does not diminish risk, and association executives should be prepared to explain the actual basis for a decision. 

When positions are eliminated for structural or financial reasons, Peterson stressed the value of objective, numbers-based criteria. Organizations can look at costs, strategic priorities, and operational needs, then articulate why certain positions no longer align with those priorities. She emphasized the importance of documenting those considerations, whether through formal memoranda or emails that capture the decision-making process.

Transparency matters when communicating a workforce reduction. Peterson encouraged leaders to speak openly, ideally in a town-hall-style format, to explain the financial or policy circumstances driving the decision. This avoids a perception of individual targeting, even though morale challenges are inevitable whenever jobs are eliminated. 

Finally, Peterson underscored the realities of state-by-state employment law. With remote and distributed staff, associations must review their handbooks and termination procedures to ensure compliance with all relevant jurisdictions.

If workforce reduction becomes necessary for associations, approach it with honest communication, clear documentation, and a solid legal foundation.