Layoffs and Leadership

TL;DR: If you can’t trust your employees with 24 hours’ access to email to say their goodbyes after you let them know they’re being laid off, you have a major problem with your hiring, firing, and/or internal communications.

In the first season of Game of Thrones, we get an immediate sense of Ned Stark’s basic honor when he tells his son “The man who passes the sentence should swing the sword.” I’ve seen too many recent Linkedin posts from employees who are being nothing but gracious and understanding to their employers after faceless layoffs where they’re simply locked out or informed via email of the decision from “corporate.” That is shameful. If executives want to be leaders, they need to demonstrate real leadership. The truly hard part about letting people go isn’t the math of how many and who, it’s the human impact, and real leaders are willing to own that decision face-to-face, not just have their assistant write a “hard day at XYZ company, we’ll miss all the great talent” e-mail, then ride home in a luxury car, pour themselves a 30-year-old scotch and hope that the share price rebounds.

I understand that there are risks to having disgruntled employees retain access to some features/facilities, but there are better options than treating thousands of employees who’ve served a company loyally for years as presumptive bad actors. If an organization has particularly sensitive databases, they could, for instance, cut off employees’ access to those things the night before, and have a first-thing in the morning call with them to let them know the bad news. You can also remind them that they’re still an employee; theft of company secrets or resources is a crime, and will be prosecuted as such. I can all but guarantee that your (ex-)employees are far more worried about how you’ll be a reference/resource for them as they try to land their next role than about disrupting your business. And if not, see above. You’ve brought in untrustworthy people who never should have been hired, you’ve failed to communicate the hard but necessary decision of who was let go in a thoughtful, respectful way (and therefore are alienating otherwise good people), or you don’t have a strategy/rationale behind your actions and are just making random cuts to try and show that you’re doing something. Even the abrupt cutoff doesn’t fully eliminate risk; ex-employees still have friends inside (who may now be reconsidering their own relationship to the company), and not allowing any communication substantially increases the disruption of the layoffs, leading to lost productivity.

In my future interviews with companies, I’m asking the following questions:

  1. What is your process for laying people off?
  2. When have you done so, why, and how did you let them know?
  3. What kind of severance/accelerated vesting/other benefits did you provide?
  4. Did you give the front-line employees the same opportunity to leave that you did your senior team?

I won’t say I’d NEVER work for an organization that’s laid people off poorly… but if I had any other options, the offer would have to come with a substantial premium. And when I’m next in a position to hire/recommend an executive to a company again, I’ll have the same questions. This is a rubber-meets-the-road test of whether or not a candidate’s values align with a client’s.

I also take issue with the “unfortunately we had to let people go…” rhetoric coming from high-margin, multi-billion-dollar businesses. You didn’t HAVE to let people go, you CHOSE to. Here are a few other choices you could have made:

  1. Pay cuts.
  2. Offering reduced hours for reduced pay.
  3. Renegotiate vendor contracts.
  4. Invest in greater productivity.
  5. Buyouts.
  6. Draw down cash.

I’m not saying any of those are ideal; job cuts may have been the best of a bad set of options for the business after a careful review of the situation. But it’s lazy and dishonest to act as if it’s the only possible reaction. A more transparent statement would be “We, the leadership, failed to adequately anticipate and prepare for a change in the business environment, and despite our best efforts, we were not creative enough to come up with any solution other than layoffs that would maintain the profitability levels that we believe the organization requires going forward.” If you’re not willing and able to articulate what else you considered, describing layoffs as if they were a law of physics rather than a personal choice, you don’t deserve to be in a position of leadership. Do better.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s