Layoffs Done Right
by Miki SaxonOne of the dumbest things consultants and HR dreamed up a few decades ago was using pretty words and euphemisms in place of the real ones—fired and terminated.
I’ve written about Guy Kawasaki, read his books and enjoyed hearing him speak since I met him at a talk in 1999—very smart and very funny. He knows that laughter opens minds to new ideas.
But Guy can also be serious when called for, as he is in The Art of Laying People Off.
Most managers hate laying people off, although I’ve known of a few who take sadistic glee in it.
Layoffs damage everybody—those doing it, those to whom it’s done and those left standing afterwards.
Guy lists 12 actions to keep the layoff from crippling your company—
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Take responsibility. Cut deep and cut once. Management usually believes that things will get better soon, so it cuts the smallest number of people in anticipation of a miracle. Most of the time, the miracle doesn’t materialize, and the company ends up making multiple cuts. Given the choice, you should cut too deeply and risk the high-quality problem of having to rehire. Multiple cuts are terrible for the morale of the employees who have not been laid off.
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Move fast. One hour after your management team discusses the need to lay off employees, the entire company will know that something is happening. Once people “know” a layoff is coming, productivity drops like a rock. You’re either laying people off or you’re not—you should avoid the state of “considering” a layoff.
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Show Consistency. I cannot understand how companies can claim that they have to cut costs and then provide severance packages of six months to a year of salary. You would think that if they wanted to conserve cash, they’d give tiny severance packages. Typically, there are three lines of reasoning for generous severance packages:
- Cutting head count, even with severance packages, is cheaper than keeping the employee around indefinitely, and we don’t want any lawsuits.
- We have lots of cash, so our balance sheet is strong, but we need to cut heads to make our profit-and-loss statement look better.
- Wall Street (or your investors) is expecting dramatic actions, so we need to do this to show the analysts that we’ve got what it takes to be a leader.
None of these reasons makes sense. If you need to do a layoff to cut costs (and conserve cash), then provide minimal severance packages, cut costs as much as you can, conserve as much cash as you can, and deal with your guilt in other ways. If nothing else, it’s a consistent story.
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Clean house.
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Whack Teddy.
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Share the pain.
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Show consistency.
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Don’t ask for pity.
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Provide support.
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Don’t let people self-select.
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Show people the door.
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Move forward.
I included full text on the three I think are most critical, but they’re all important, so take the time to not only read them, but also understand the reasoning behind them, because if they don’t resonate with your MAP you won’t be able to implement them should the need arise.
Guy’s subtler than I, but we agree that immediately after your announcement the dumbest (my adjective) thing you can do is go to your office—no matter how much you want to hide.
Your people need you now more than ever, both the folks leaving and the ones staying. The minutes and first hours after the announcement all your managers need to be with their people—no exceptions, no excuses.
No matter how sick a company is people often manage to convince themselves that somehow it will all go away. I’m watching that happen now with a woman I know and it’s sad; sadder because she knows she’s kidding herself, but still does it and puts off any effort to find another position.
Shift happens and the world has shifted.
So if you have to do it, do it right.
Image credit: flickr
