Layoffs: Time to start planning.
Netflix terminated 150 full-time employees in mid May, Coinbase shared their plans to let go of approximately 1,100 people. Other companies like Better, Compass and Redfin are cutting between 8%-10% of their workforce. The list continues: Tesla, Stitch Fix, Paypal, Noom, Bird, Glossier, and many more have announced a cut in their workforce. According to Layoffs.fyi., this year tech companies alone have laid off a total of 35,000 workers.
Inflation, rising interest rates, geopolitical issues and a global pandemic are many of the factors that have contributed to the uncertainty we are facing today. As the government works to correct the market, many organizations are in a wait and see period. Some investors are applying pressure to their founders to find ways to cut their burn rate and conserve cash. Other organizations are feeling the immediate impact with numbers no longer “up and to the right” at the rate they were before. There are still companies that are maintaining strong financials and have a steady business model. Regardless of your current situation, CEOs, CFOs, and CHROs are beginning to think, plan and take action. Even if your company isn’t currently facing a reduction in force, you should create a set of guiding principles for how you’re going to make short-term and long-term strategic decisions.
So what now?
Realign to the company mission:
Ask smart questions to determine hard truths and hold yourself accountable
Determine what strategy best supports your company mission at this time
Discuss what fundamental changes need to be made to support your strategy
Map the skills required to execute your strategy and map people to the skills
Determine where you can reduce the time and cash spent on anything that does not directly support your strategy
Confirm your timelines and start communicating to other senior leaders
Work with an HR leader to run a compliance check and put severance packages together
Create a communication plan and ask for feedback
Share your decision-making process.
Respected leaders provide context and step-by-step guidance on how decisions are being made. Now is the best time to exercise your company’s core values and model behaviors you admire. Every layoff should follow these principles:
Commit to diversity and inclusion
Map skills and capabilities to your new business strategy
Provide a fair, valuable and human severance package
Meet with every affected employee. Make sure you have a witness present
Have answers to the important questions before communicating
Take care of your employees.
People are your company’s biggest asset. It takes a lot of money, time and energy to hire and train high-performing teams. It takes just as much effort to build your company culture, employer brand and reputation. If your company isn’t facing a layoff, now is the time to start looking at your numbers and working backwards. If the time comes that you do have to perform a layoff, make sure you can offer a severance package that supports your employees, culture and reputation. When making layoff decisions, create a fair process following all state, federal and local laws. Consider offering non-traditional items in severance packages, such as mental health benefits, job search support through alumni networks, career services, letting employees keep their laptops, etc.
Be thoughtful, clear and concise during a layoff.
Provide information with as much clarity as possible. Describe the process and when each step will be taken. Leadership should be trained and equipped to meet with every affected employee one-on-one on the same day as the announcement. Have paperwork, severance packages and other benefits ready. Give affected employees time to say goodbye. Once you’ve finished meeting with employees whose jobs were eliminated, meet with every employee that is staying. Keep the employees who are staying well informed. Many leaders underestimate how much work, time and energy is required to help the morale of employees who weren’t affected by the layoff. Many employees who remain at your company will need additional support to adjust to the new reality. Now is the time to share the details of the new business strategy and empower employees to rally around your mission. Consider offering an open Q&A session for employees to ask questions and get answers. A strong HR/People Operations partner can help you prepare for this, remember that people will still be processing and this is an opportunity to lean into your values.
Be human.
Share your thoughts. What’s important to you? Most importantly, share your feelings. Your employees, board members and community members want to connect with you. After Airbnb’s layoffs in 2020 Brian Chesky didn’t hold back and captured the hearts of many when he wrote, “I have a deep feeling of love for all of you. Our mission is not merely about travel. When we started Airbnb, our original tagline was, ‘Travel like a human’. The human part was always more important than the travel part. What we are about is belonging, and at the center of belonging is love.’” Our world now requires new leadership; leadership that is vulnerable and courageous.
Tandem partners with startups, high-growth businesses, investors, founders, CEOs, and executive leadership to evaluate business needs, address gaps in organizational structure, help train employees and coach leaders, and offer insight into all aspects of people and culture. If you have questions about layoffs, need guidance or help with strategy planning or executing human-centered layoffs you can email us at hello@tandempeople.com.
