I know we’re gonna do the basics as best we can of course: more than 2 months’ redundancy package, try and find roles for people as best we can, do the paperwork right so they can claim anything they need to.
I want to know your advice for the human element; how to tell people and not be cruel. How to balance that against honestly trying to save what we can.
Eg. I hate that when I read stories about layoffs it always comes as this awful surprise and then you have to immediately leave, it’s so abrupt how can you say goodbye properly? But that seems to be some protection against someone acting in a way they normally wouldn’t and doing something destructive in the heat of the moment. How can we possibly preserve both properties?
We want to tell people one-at-a-time and in-person. Is this best? Why do companies even mass-tell people? But then I don’t know how anyone can keep their composure going back to their desk to pick things up though... Quickly word would get out, diminishing the point of telling people one-at-a-time. Where to have these conversations is also an issue, the office is pretty small. And we need to have a lot of them in just a short time too.
It’s going to be awful regardless, but I would like any advice on how to make it the least awful. The least-awful, that is, for those who have to leave; since if I get the dubious privilege of riding the death spiral a bit longer then we can leave my own feelings out of this.
- Job help, docs, classes on how to get a job
- Leadership should share consequences, at a minimum salary reductions. This is important because typically bad decisions come from the top, while the folks at the bottom suffer from them.
- Be completely honest at every point.
- Look 'em straight in the eye, tell them you're sorry because XYZ.
It happens. Don't beat yourself up over it. I've been laid off in the past and it was ultimately positive. Got a break and it led to better opportunities.
I'd call it a "layoff" if it is expected that business conditions will improve and employees will be given the option to continue their employment at that time.
If it's a permanent situation then I'd call it something else like "dismissal for business reasons" or "downsizing due to market conditions."
Personally what I'd love to see companies do is:
- executive staff and management taking pay cuts (ideally zero pay for C-level execs and directors) first
- offering an option of reduced hours and/or pay
- offering an option to return to work if business conditions are expected to improve
- offering ownership or open source agreements for canceled projects if possible
- providing at least six months of severance pay for anyone who is dismissed, paid immediately along with full vacation and sick day allowances
- immediately vesting any pending equity and options for anyone who is dismissed
- providing office space and placement services which people can use while looking for a new job
- working with other companies to provide jobs, even temporary or contract jobs
- eliminating noncompete restrictions if any
- telling everyone at the same time, as soon as possible
- honestly explaining the situation and how and why people were selected
- honestly explaining the company's financial situation
- being open to creative suggestions from employees for alternative options
- giving two weeks' notice, much as employees would be expected to do
- sponsor a company alumni organization (startupalumni.org) with social events, seminars, and other events, to enable people to keep in touch
- provide alumni email addresses (@startupalumni.org)
You answered this question yourself mostly -- In a team of 50, with half being gone, the rumor will spread faster than you can notify people. You'll have people just sitting waiting for the call to see if they are gone or not, and communications will look like they are mismanaged.
So tell people quickly and concisely, and focus on their primary question first - "How does this affect me?" Do not let people wonder for even a minute if they are staying or going.
Although I likewise dislike mass notifications, they way I've seen it done on multiple occasions, both in-person and remote, is to hold two simultaneous meetings. "If you are in this room, you are staying." vs. "If you are in this room, you are leaving." That way, the question of "Where do I stand?" is never in doubt. And you at least have everyone in the same room in the same boat, so you aren't trying to manage both groups at the same time. It sucks, but it works. And you will not come out of this with people thinking positively about you, so just take that hit and get it done.
Also be careful with helping them to find new roles. Not everyone who is let go is going to want to just jump right into another shop doing the same thing. Assuming that they do just want another role right away can make it look like you consider them to be a commodity, not a person with their own direction and goals in life. So feel free to offer help, but do not make assumptions on what that help should look like.
My first job in the industry, I was in a five person department that needed to reduce it's headcount by one. I can tell you that had someone laid someone off, it would've been me, just because of the needed experience and locations and stuff like that. Though it was never said at the time, it just is the logical call.
Anyways, my boss chose instead to furlough the entire department one day a week. Obviously we lost 20% of our pay and had an extra day off a week. I found it actually really nice at the time because my income was well above my spending then, and I had a weekday off for doctor's appointments and post office trips and stuff which is hard to do when you 9-5 Mon-Fri. But obviously the company was in a weak spot, so I also started looking for a new job.
When I found one, everyone else in my department went back to full time, I never had a gap that prevented me from covering my bills. I am still super grateful to that employer for how they handled this.
I've had to layoff direct reports during multiple layoff waves at a couple different companies. (Moreover, I myself have been laid off when a small company went out of business or when a business unit was eliminated.) I don't think it's difficult to avoid cruelty during a layoff, you just have to be very honest and make it clear that it is not personal. The announcement should be company-wide, but then talk to each person individually or in small teams if possible, and afterward go together offsite to a bar/restaurant and hang out with everyone who can join.
Honestly in many cases it's better for them to move on rather than go down with a sinking ship. In tech over the past couple decades there's always been jobs elsewhere for engineers, even after the dotcom bust. I have tried to help place people elsewhere using my network and told them I'd give them a good reference if they needed one. HR tends to discourage you from making an extra effort like this -- e.g. "you should only acknowledge that they worked at the company, don't give a recommendation" -- because a recommendation can become a liability, but I feel it's my recommendation as their direct manager and I am taking personal liability for it.
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There's something else I'd add -- not about layoffs but related to firing people. Even if you're firing someone for performance reasons, IT DOESN'T HAVE TO BE CRUEL. I've seen so many people get fired in such a cruel manner, and it's totally unnecessary. There's absolutely no need for the manager to have any sense of anger or betrayal over a person's poor performance in a role.
Someone's performance in a particular role in a particular company has nothing to do with that person's worth as an employee. It was always just a bad fit, or a bad situation -- it doesn't mean that this is a bad person or even a bad worker, and should not reflect upon their self-worth. In my career, I've had to fire two people for performance reasons, and both times I made this difference clear, and thankfully we were able to actually maintain a friendship afterwards.
Yes, be humane. Yes, be honest. But also be careful. You will be surprised by who becomes litigious. Avoiding lawsuits will help you continue being humane to those still employed.
1. Is your employment practice liability insurance policy up to date?
2. Say nothing about why a particular person was chosen. Saying you let someone go because they are expensive, if they are over 40, could open you up to an age discrimination suit.
3. Have two people on the call with each person. One to deliver news. One to take notes.
4. Have IT terminate their access as you start the conversation with each person. If someone needs access to get family photos or something, you can help them later.
It sucks, but it is also rather routine event. Two months severance is very generous if you really are in desperate straits.
Good luck.
That sounds to me like the most humane way to go. Kind of wake for the company as it existed so far. Let people mourn together.
One thing that seems popular is a mass notification that says "hey everyone, layoffs are coming, we'll notify each of you individually whether you're affected or not." I suppose you could do the in-person meetings after that, and that might be okay for a small shop like yours, but it also seems like it might drag things out? I wouldn't want to be sitting around wondering if I'm going to be the next person called into the HR office.
I have read many comments but the cruelest part for me is that when this starts nobody feels safe and you don't want this feeling to stick around with the ones that stay.
It's better if people leave the same day to avoid sabotage and helps to turn the page fast.
And be aware that your culture will be hit and you will loose more people that the ones you are letting go.
Two, avoid saying anything about how hard this was for you. They do not care.
It is definitely best to tell people in person, and individually. I don't have any advice as to how to do so in a small space. It is for the best to restrict access to sensitive systems once a person is laid off, but you can keep them access to slack or email so people can say goodbye if they'd like.
Everyone that is staying leaves the office at some point early, before anyone could be thinking about lunch. They don't all leave together, some just don't come in.
There is a company wide announcement for an immediate meeting. Nearly all attending are layoffs. It's a nice touch if the CEO or President is there and says some nice things, or whomever your best aural talent is. You have them lay out the facts, thank them, wish them luck. That's it. Give them time to process and start moving at their own volitions, and respect them as civilized individuals.
You probably don't want to give away the exact financials (runway/funding/expenses/customer numbers), but you can still be specific without that. Like "We hired you because we wanted to deliver X in Y months. We took the risk to be the first on the market, but it didn't work out. With the departure of the XYZ customer, we simply don't have enough cash to keep paying the salaries.". Make sure it reads more as a personal email than a soulless press-release with "given the worrying situation", "on our journey" and other BS phrases.
Bear in mind that people will inevitably question "why I got laid off why John from team B did not". If you want to reduce this stress, find a good formal explanation (like we are forced to close feature X because we lost customer Y, and hence are laying off the folks that worked on it).
Otherwise, good references, decent severance. Canceling some externally observable verifiable bonus for yourself could somewhat reduce the tension. You could forfeit that annual board meeting in Hawaii, but buy a hell lot of goodwill from people that worked with you (and that will still be in your network) by being public about that. It could pay off nicely some years from now.
My last firing was a blindside, got the cardboard box and security escort. What really bothered me, for a long time, was that all the programs, tools, reports, analytics, processes that I had built were all taken from me. Tons of complex SQL queries, all the code for all the programs and dashboards I created, many non-trivial Excel models, business simulations, all kinds of little experiments with different data tools, much more. The amount of time it would take to rebuild would have been enormous (years, easily), but of course I couldn't anyway without access to the data sources. Additionally, no examples to show or ability to build a portfolio for future interviews, etc. The company would have lost nothing by sending me a clone image of my PC's hard drive, which I requested multiple times.
Money is nice, sure, a little safety net, but the work itself is often irreplaceable.
Simplifying a lot of detail - managers have to fire their own people. Don't delegate this, no outsourcing, don't tell the sadistic one to do it.
The head has to address the companu, admit that it's their mistake. They overhired, they didn't hit sales targets, they had scope creep. Whatever it was tha led to this. Ideally the CEO. Then don't avoid them, be present, show that you care.
I had a friend who had to deal with a mass layoff. She told people that everyone is replaceable (more to protect her feelings, not theirs). She is no longer a friend.
Do be clear. You can be apologetic, but make it clear that the decision has been made (no "I think"). A sharp knife hurts less. It shouldn't sound negotiable.
Do protect the reputation of those laid off. Often they have more good than bad if they weren't fired immediately. You do owe a reasoning to those who worked under them - if you don't, they may gossip and speculate. Let the laid off person decide what the story is.
Then you do have to offboard them and escort the right people out, especially managers. Have that severance package ready, have security escort them as they clean out their desk and walk them out of the building.
This is especially important for employees with families since they often have a spouse or some kid needing health insurance. The loss of a job is dangerous for their lives.
The whole day will be bad. It’ll become clear quickly that those with meetings scheduled are getting laid off. People will wait around for their turn. Others will get out of there fast.
When I got laid off, they divided the team up into two rooms. It turned out one was the people who were getting laid off, the other staying. It was apparently horrific.
I was actually on vacation at the time and not there to see it go down. Instead I had the founder call me on the phone to lay me off. He was more upset about it than me. I appreciated the personal call but found the “this is hard for me too” of the founder annoying at the time. I was losing my income. He still got to be the founder.
2. Provide a promise of positive references and access to managers after termination.
3. Allow plenty of time for folks to say goodbye to coworkers and gather their their things in their own time.
4. Consider contacting recruiters to let them know that folks may want to contact them.
5. Be grateful for the effort that these people have given to your company.
6. Make sure that HR will make it a priority to assist in the transition and answer any and all questions for several weeks after termination.
7. Remember that a large termination will send shock waves through your staff, so expect good people to leave after a termination event. Do whatever you need to do to keep good people happy.
One thing you can do, that costs you nothing, is give them the option to instead continue to work out their 2 months in lieu of severance to provide an extra 60 days of job search.
Quite often they'll have a family, home, car and assets in the US that they'll need to deal with if they can't secure another job in that limited window.
Quickly and deliberately.
The mitigations are things like severance and job search help.
Talking about how bad you feel having to do it is not less cruel.
The cruelest part of layoffs is false hope.
You knew today and it was Friday.
It should have happened by the end of business.
Good luck.
There has to be a series of things over time that lead to such decisions. I think if such things (that can lead to the layoffs) are communicated in time to the people and with full honesty, this can atleast prepare them to be mentally ready for the possible extreme situtation of a layoff.
Do organisations deliberately don't disclose such things to avoid creating any sense of doubts in people?
Don't pull shit off like "you have 30 mins. to empty your workspace" or "this guard will escort you outside".
Bad:
Supervisor comes to your office and asks you to come with them. You know you are being laid off, because everyone knows they are doing layoffs. You go to your bosses boss’ office and they tell you. They give you a bunch of paperwork. They escort you out, and you schedule a date to come back and get your stuff.
Good:
They announce there are going to be layoffs. They justify it as a need to ‘fill in kind justification’. Explain the process and procedure. Line up an employment specialist(s), from outside the company. They will provide resume writing help, job search help, financial counseling, and possible family counseling.
When you tell people, you give them a month or two to hand over their work and get their resumes out there, while they are still employed. IMHO being unemployed and looking for a job costs you between 15 and 30 percent of your salary.
Provide a pseudo office where they can go to work on job hunting. Typically away from the work site.
When I was laid off by Siemens they did all of these good things. Although prior lay offs they did not. But I am grateful to them for how they handled it when it was my turn.
Extra bonus good:
Before the end date, organize the people into small groups (3 to 6). These groups have to be people that can care about each other’s success. Have them meet every other day to discuss how they are doing at finding another job.
At the groups, the people need to set goals. Establish limits (e.g. I will not take a job that pays less than abc). Define plans. Set the date when you need to revisit this and possibly change your plans / limits / goals. This date should be no more than 3 months.
Your group’s objective is to share success, support each other, and hold accountable for achieving plans.
It is easy to make the group meeting just a BS session. Need to make it formal with everyone asking about each other. It is easy to lose focus and wallow in self-pity and anger.
When someone gets a job, celebrate it. We did steak and eggs breakfast.
Super bonus good:
Set up a company, that employs everyone at a ¼ time as consultants to the job they used to have. This provides then the ability to retain their salary. But might negatively impact unemployment.
If the country you’re in doesn’t provide unemployment benefits then this is too low IMO.
In The Netherlands, unemployment after 6 months of working means you get about 70% of your gross salary paid for 3 months.
I would at least make it 3 months, especially in today’s economic environment.
How about NOT hiring a ton of people as a "metric" to show investors? What happened to leaner companies especially while they're growing?
If i would live in a country with more guns than people i would not want a bunch of former employees with a grudge against me...
Given that you have a firm pool of money that you can allocate which seems to be less than you are comfortable with look if you can grow them. C-Suite getting pay reductions is one thing that should happen for sure. There might be other ideas obvious to the people you employ. You as C-Suite are missing.
If possible create projections (like a month by month spread sheet) for the future of the company based on the success of projects (or however you make money), costs and so on. Show to your employees that that company has a future after the cut. Show what the managements plan leave for compensating the people you have to let go. Play that out. Show of the "no intervention" world projections. Show what it means to close the entire company, whether that leads to better or worse compensation. Then talk about the limits of the plan. What it didn't include and model. That it didn't account for people cutting their hours or reduce their own wage. People will know whether they will be let go in x days. That management will talk with everyone over the week and give an indication whether it is likely that they will be let go to collect pledges what pay cut they could accept. Whether they have any ideas to help the companies situation (cost cuttings, release monthly from last months). Whether they intended to leave the company anyway. Then management crunches the numbers using options for savings and makes a few proposals including one of closing the entire company. And have the people decide. Everyone is given a print out how each option will affect them one what the options mean company wide. Then people vote via the Condorcet method. In case there are ties. Management will have to indentify key grievances and create some variants to fix those in the tied plans and have a second vote that day. Another round of Condorcet to eliminate all untied ones. Then instant run off in case of more ties. Those options should come with a profit share in case surplus profit emerges where people who took cuts or left the company against their will get some payout.
I am sure it is to late to fully set that up now but if i had to do such a large cut that is what i would want done.