Easier said than done. Here's a specific scenario. You tell me what management should share and when.

Revenue is seriously down. If this trend continues for another quarter or so, we'll have to start layoffs of ~10% of the engineers.

Do you share the full news now, with no idea of whether there will be layoffs? Do you "lie by omission" by sharing that revenue is down, but not mention the potential consequences?

The CEO typically is hoping for one more deal to close, to turnaround the company and not have to go through the layoffs. Why scare people if it's not needed?