The only reason employees gossip about matters such as possible job losses is because they are not being communicated with clearly enough by the management so they are forced to speculate. Gossip in the workplace can be highly destructive and can undermine senior management and result in low morale. I would say now is most definitely the time when HR professionals should put their training to good use and ensure there is a clear bridge of communication between management and employees and that both parties are kept well informed of the other's concerns and intentions at this time.
It would be naive to suggest that gossip in the workplace could ever be eradicated - it's a natural part of daily office life - but at a time like this HR professionals should do everything they can to ensure false or exaggerated rumors are not spread.

I think there's very little that can be done about this. Even with the best management to staff communications in the world, workers never really believe that they're getting the whole story. Gossip simply fill in the gaps and it's taking on increased significance in the current climate where everybody is worried about their jobs.

In fact, management being too honest might have opposite of the desired effect. If everybody in a struggling company was fully aware of how bad things really were, you could see a shift from unease to outright panic. Gossip can lead to fear, it's true, but it's a slightly nebulous fear, a monster under bed. If the CEO comes out and says he's probably going to cut the workforce by 50 percent in the next six months, the monster is right there threatening everybody and chaos could well ensue. Anyone seen the movie Godzilla?

Good point Joachim. But no matter how hard they try I don't think any employees will be able to hide the truth completely from their employees. There are also small signs that things are not as they should - cost cutting, long boardroom meetings etc.
Plus it can be of benefit to employers to let staff know when the company is struggling. Nothing motivates people to work harder than the thought that their job could be on the line.

Jomo: "Nothing motivates people to work harder than the thought that their job could be on the line."

Thank god I don't work for a tyrant like you.

Employer- Employee interaction is vital, and its no point trying to hide things. The Golden Rule is, 'either you tell or someone else will' - which might not be in your best interests. Having said this, a need in 'Change of Attitude' is to be emphasised. Its time we shed certain Hypocracy and work towards reality and positivity....lemme ask myself 'what can i do now, that would make my employees happy and me thriving ??'