Layoffs

A sad topic for today: Layoffs.

Layoffs are necessary when the future of a company is at risk and need to reduce its expenses to survive and compete in the marketplace.

They are unfortunate but a necessary evil for the continuation of the company.

Managers in layoffs have two responsibilities:

First to deliver the news to the impacted employees.

Second is to reassure and reenergize remaining ones.

It is important to be compassionate but direct while delivering the news. A new manager should practice their message prior to the announcement. They should explain the why and the how for both the impacted and the non impacted who will be watching closely.

It is crucial to identify who was and was not impacted as soon as possible. Announcing layoffs and lingering on identifying who will be impacted is absolutely awful for the productivity and the morale of the team.

Hence the importance of tight lips while planning the layoffs in upper management.

It is also important to communicate clearly and have management available and accessible for the larger team. This is a time of high uncertainty and having management around is valuable and comforting for the remaining employees.

A generous severance when possible is also incredibly helpful. It shows that the company cares about its employees and will be appreciated by the impacted and non impacted ones

During Airbnb layoffs in the beginning of the Covid pandemic, although I was not impacted, I witnessed how generous they were. I think they pioneered accelerated vesting for the impacted employees. I will never hesitate or feel bad about staying in an Airbnb because of this.

On a personal level, the manager should reach out to his personal network and try to refer impacted employees especially the good ones that were just impacted for financial reasons.

This goes a long way in helping impacted employees and build a lasting relationship with the impacted employee and the manager.

After doing the announcements and going thorough the layoffs, a manager should move into comforting the existing team members and explain to them the roadmap and how the company is set for success having gone through the layoffs.

Another incredibly important practice here for the credibility of the management and the health of the company is to avoid doing layoffs multiple times.

It is extremely destabilizing for the company. Hence the need to cut deep and wide when doing layoffs to avoid the need of doing another one in the future.

Companies that goes through layoffs when done in a compassionate and correct manner might emerge stronger, leaner and more competitive out of them.

Unfortunately the opposite is also true and when done incorrectly can lead to loss of talent and spiral the company into bankruptcy.

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