The Psychology of Executive Termination

Termination is one of the most psychologically challenging experiences an executive can face. If not managed carefully, it can devastate an executive’s self-confidence, mental health, physical health, family relationships and career. Termination can affect an executive in numerous ways.

Guilt and Shame

Termination can leave an executive feeling guilt and shame. For example, they may feel they have failed or their employer has rejected them even if their dismissal was not their fault. This guilt and shame may also result from feeling they have let others down, such as their family, colleagues, or employees.

Executives may feel a deep sense of loss after termination. They may have lost their livelihood and their sense of purpose. This loss can be substantial for executives who have dedicated much of their careers to attain their positions.

Power and Influence

Senior executives are used to having power and influence. However, when they lose their jobs, that power and influence dissipate. This loss is a further blow as they may wonder whether they can regain the same authority in their next job.

Financial Problems

Even though executives invariably receive reasonable compensation when terminated, the longer they remain unemployed, the greater the financial difficulties they are likely to suffer.

As executives are often the primary earners in the family, losing their job may cause financial problems that can add to the stress of job loss. Not all executives are wealthy. With large salaries come expensive lifestyles.

Terminated executives are distressed that they may have to sell their holiday home, liquidate investments, or downsize their house and car, incurring a loss of respect from their friends, although this is usually imaginary.

They may even need to cancel their precious golf club membership. Finally, they may face the prospect of taking their children out of private school as they can no longer afford the fees.

Although these outcomes are not inevitable, the prospect of taking these actions is a source of stress for the executive and the family. It is, therefore, not uncommon to find family relationships and friendships breaking down and adding more stress.

No alt text provided for this image


The worst psychological effect of termination for an executive is a loss of Self-Identity. People are motivated throughout their lives to maintain a stable and coherent sense of self. Job loss damages this stability and coherence, leaving a person drifting, not knowing how or where they fit into society. In addition, a damaged Self-Identity may contribute to various psychological illnesses, such as anxiety and depression.

Psychological illness can incapacitate someone so much that they lose the energy they need to conduct a job search and the confidence to present themselves well in interviews and presentations.

Self-Identity derives from two sources, personal characteristics and Social Identity.

No alt text provided for this image

Personal Characteristics

Personal characteristics include personality traits, health status, appearance, intelligence, values, beliefs, aspiration and capabilities, such as being able to perform the role of a scientist, engineer, doctor, lawyer, or company executive.

Social Identity

Social-Identity refers to identification with the features of the various groups to which someone belongs. These groups include family, nationality, ethnicity, professions, professional associations, religious groups, sports teams and belonging to a political party. Social-Identity augments Self-Identity.

Central to Social-Identity is a person’s association with the characteristics of the organisation that employs them and the various organisational subgroups to which they may belong. For example, an executive may find it meaningful to be an employee of a particular organisation because of its reputation, performance and capabilities.

The executive may also enjoy working in a particular team, department, or division because of the nature of the work, the value it contributes and their relationships with their colleagues with whom they may share personal characteristics.

Job loss can deprive a person of the ability to participate in self-defining group activities. This outcome is because Social-Identity and personal characteristics interact. If one cannot work, they cannot fulfil their aspirations, practise their profession, use their capabilities or spend money to maintain the lifestyle that, in part, defines them.

A Career Strategy

A terminated executive’s first task is to develop a career strategy. Termination can be a blessing in disguise as it allows the executive to review where they are in their careers and envisage a new future. Losing their job may prompt an executive to start a business, develop a portfolio career or change industry.

Once the executive has decided what they want to do, they must attend to the necessary tasks to achieve their objective. These tasks involve networking, developing self-presentation materials, researching industries, organisations and published opportunities and consulting with search firms.

However, many executives grossly underestimate the challenge this effort poses while trying to handle the psychological impact of termination on them and their families.

Even though an executive may have held a very senior position, it does not necessarily follow that they will find it easy to obtain an equivalent position in another organisation. Typically, the more senior an executive is, the longer it takes them to find a new job that suits them.

Although wrong, age discrimination is pervasive in the executive job market. The average age of a senior executive is falling, and employers are looking for people who can give them at least ten years of service, usually more. Unfortunately, this scenario disadvantages executives in their mid-fifties and above.

Executives who apply for advertised posts may find recruiters use software to screen their CVs for the characteristics the employer is seeking. However, screening software often rejects CVs unless they contain specific keywords and phrases. The applicant, therefore, never gets the opportunity to present themselves at an interview.

One very senior executive I know made over sixty applications in 2021. Unfortunately, none of the organisations he applied to offered him an interview. He received only a handful of rejection letters. I asked him why he thought he did not get an interview. He replied,

“Age discrimination. Pale, male and stale discrimination. The bot-driven recruiting industry doesn’t even look at your experience and value-add capabilities – you are filtered out right upfront.”

This executive was fifty-eight years old in 2021.

This difficulty securing an interview, let alone a job, is highly debilitating.

Consequently, unemployed executives have to muster considerable resilience if they are to come through this challenging period in their lives.

You will need help

If you are a senior executive and your employer has terminated your employment, you will need professional support to help you through this phase in your life.

I do not mean the support of search agencies and people in your network, although this is essential.

It would be best if you had the support of an independent, qualified, experienced executive career consultant who can help you navigate through the storm of sudden unemployment.

Executive career consultants are not headhunters; they will not take a commission from any organisation that employs you or a search company that finds you a job.

No alt text provided for this image

However, they will help you to manage your stress, put things in perspective, support you when you experience family or financial problems and help you build the resilience to succeed.

The consultant will help you to plan your search campaign, use their network to enable you to access the unadvertised job market, prepare you for interviews and presentations, coach you to learn from rejections and encourage you to keep trying.

Should you need a referral to other professionals, the consultant should be able to handle that for you.


Termination can be a traumatic experience for any executive. Unfortunately, the more senior the executive and (apparently) the older they are, the more complex the challenge.

But it is possible to secure another senior role, change to a different industry, gain more qualifications, build a portfolio career or set up your own business.

However, because of the psychological effects you are suffering, you will need a qualified, experienced consultant to be your mentor and friend.

Andy Milward, PhD, CPsychol

No alt text provided for this image
No alt text provided for this image
No alt text provided for this image

RHF Trustmark is a not-for-profit service that recognises business-to-business providers for their commitment to quality service provision.

The RHF Trustmark identifies companies, professional services partnerships, and small businesses that meet exacting standards of client support and expertise.

< Return to news