This question is a regular feature in advanced interview questions for Leadership role, be ready to tackle it.   Sharing any kind of bad news with the team is to be handled very sensitively as, personally, we all are placed differently at any given time. The interviewer wants to see how mature you are in handling bad news. Therefore, they quoted the bad news in question. Bad news should be given keeping in mind time, situation and person. Your reply will suggest to the employer how sensitive you are considering all three.  Never share any bad news over an email shocking the team. This also creates negativity about the organization in the market because employees get insecure about their future with the organization. You can quote any example here.  Look at the following example to understand how to answer this question: “Pandemic affected all industries, companies, and employees, and thus, when our content department decided to go lean, it was devastating news in itself because hardly four people were working in the content syndication team. Two resources were in leadership positions and had to be secured by the management. Thus, it was evident the remaining two mid-level resources needed to be let go. It was difficult as the market was full of such news already, and there was no guarantee of opportunities elsewhere.  I took the approach of meeting them personally and explaining the management's decision. They were disheartened and felt fearful upon discovering that they were let go of. I offered them an extended notice period and 2 months' additional salary to secure and support them for as long as possible. I also referred to their profile in my network. Both got the jobs after 3 -4 months with pay cuts, but a few months were difficult due to uncertainty.”