Laying the Groundwork for Respectful Layoffs: Lessons from Past Mistakes

There’s no easy way to do layoffs. Nobody wants to hear they’re being let go, which is why nobody wants to deliver that news. But if recent business history has taught us anything, it’s that somebody needs to do it — this is not a job to be handed off to technology.

Vimeo, Amazon, Salesforce, ByteDance, Disney, Twitter, Meta, and on and on: the list of businesses that have let go of staff in recent months is practically endless. As of early May, in fact, one of the top online trackers counted 650 firms around the world that have made layoffs since the start of 2023. That’s more than five per day.

Set aside the economic trouble sign this represents, and the key question raised is how businesses can make cuts without upsetting the apple cart. With so many people working remotely, spread across time zones and offices, countless companies have struggled to find the right balance of empathy and efficiency.

The Wrong Way to Do Layoffs

One of the more prominent recent examples: Google-parent Alphabet’s decision to lay off 12,000 staffers via email in January 2023 inspired a handful of op-eds and condemnatory articles in major publications like the New York Times, Wall Street Journal, and Inc.

This is not a new problem. Back in 2006, Radio Shack got into hot water after firing 400 workers at its Fort Worth headquarters via email. Forbes described it as “a new low in management and labor relations”. Yet that did not deter the UK delivery firm City Link, which in 2012 decided to play the Grinch and laid off some 2000 staffers via an email on Christmas Day.

Tech giant Microsoft might have topped them all: in 2014, the head of its devices division informed 12,500 workers they were being laid off in the 11th paragraph of an internal strategy memo.

Since then the business world had seemed to make steady progress. But then in early 2020, just as we seemed to have settled on a solid framework for smoothly handling layoffs, the pandemic hit and upended workplace communications. A sizable portion of the workforce was suddenly working remotely, and the rise of new technologies like Zoom and Slack mean staffers are able to record online chats and meetings and later share them with the world.

Tech firms like Bird, Carvana, and Coinbase have demonstrated the impact of poorly executed, out-of-touch approaches to downsizing. When layoffs are done poorly, departing staffers feel the sting and companies not only lose control of the message, they lose face, undermining their brand and reputation.

The press release or email might lack empathy, the reason given for the decision could be dubious, or there could be a leak and the press finds out before the workers. None of that looks good, and social media often makes it all the more difficult: the court of public opinion tends to be unkind to corporations, particularly when there’s video evidence. Never before have business leaders faced so much scrutiny.

Make Cuts with Respect and Consideration

So what’s a company to do? It’s best to keep it simple. First off, people being laid off want to hear it from the horse’s mouth. Quite understandably, they feel they deserve to learn from their boss why they’re being let go. They want to see you take responsibility and show you care.

Beyond that, it helps to do your research. We cited a few above, but there are countless examples of companies doing layoffs the wrong way:

• In December 2021, Vishal Garg, CEO of mortgage lender Better.com, laid off 900 staffers in a one-way Zoom video. To make matters worse, he focused on his own feelings, rather than those of his stunned staff. “I do not want to do this,” he explained. “The last time I did it, I cried. This time, I hope to be stronger.”
• Ride-share leader Uber did much the same in May 2020, laying off 3,500 via Zoom.
• Tech firm PagerDuty ended its January 2023 layoffs email with a quote about overcoming adversity from Dr Martin Luther King. The CEO later apologized.
• In April 2023, fast-food king McDonald’s added a new twist, shutting its corporate offices to allow hundreds of staffers to work from home before informing them they were being let go.

Even as many companies continue to argue that email layoffs are the fastest and most efficient route, a new and improved playbook is emerging. A crucial first step is to train managers and executives how to have tough conversations. Bad news is inevitable, but having a leadership team that is able to leverage emotional intelligence significantly reduces the chance of backlash.

Here are some more helpful steps to take:

• Plan ahead and thoroughly prepare for every eventuality. View your plan through the eyes of those leaving, those staying, and your clients. The first two groups are likely to need significant support, and everybody will need a reasonable explanation.
• Craft a clear and empathetic message, explaining the reasoning behind the layoffs and the criteria used and setting expectations for severance. Be as transparent as possible.
• Choose the most competent, most respected executive to deliver the announcement in a video to the entire staff, or entire division if only a segment of the company is facing cuts.
• Issue a press release immediately after sharing the video, getting ahead of potential leaks.
• Write up a more detailed announcement and explanation for the entire staff. This could be an email, memo, Slack message — whatever works best for your firm. But everybody should have it in writing as soon as possible, with a clear reason given for the cuts.
• Schedule calls with each of the laid off employees to allow for a respectful, personal conversation. If you’re not able to schedule individual calls, at least break them down into smaller groups. If possible, give those being laid off an opportunity to express their thoughts. Some might just want to say goodbye.
• Provide a reasonable severance package and, if possible, offer outplacement assistance.

From the moment of the initial announcement through the final media interview, productivity will likely suffer. Thus, the quicker you’re able to complete the layoffs, the sooner your company can move on and resume peak performance.

Just keep in mind the need to be respectful and empathetic. Losing a job is often devastating news, so robust support and follow-up is an absolute must. This not only helps the former employee overcome the blow, but is likely to help your firm avoid a sharply negative review on a site like Glassdoor. Take the time to make the one-on-one calls and hear what people have to say, and maintain a positive employer reputation in the process.