Laying Off People, The Right Way

Laying off people is never easy, especially in challenging times when others are doing it, too. Having done this a few times over the years in a few countries, perhaps I can offer some thoughts.

First, no matter how you do it, layoffs are painful for everyone involved, obviously mostly for those being let go. While there may be a few folks who were wanting to leave, or whom you wanted to leave, in most cases most of the people are valued team members pulling in the harness every day, and for the long haul. Some changed their lives & living arrangements to work here.

Fairness

Fairness is a key element of any involuntary departure plan, as is making sure you keep enough of the right resources to keep the trains running. This is a delicate balance in most organizations, as you often have to retain minimal staffing in nearly every area, often at the expense of talented, yet costly or redundant people in some areas.

Broadly, to plan the layoff, you want lots of quick confidential planning, with cost and payroll models, and of course a good sense of your target cost savings and short or medium-term resource needs. This includes as generous departure compensation as you can manage, which will vary widely based on the company and team history, financial status, and likely much more.

Once you have basic models, you have to sit with senior and all other managers and sort out the real details of who is going and what the packages are, then the timing and process. The process is usually more challenging and involved than people are prepared for. Depressing, too.

Just the planning part will likely make you and some managers lose sleep and feel a lot of stress. You’ll feel you are letting down the team, perhaps crushing some people’s dreams, goals, and immediate financial future. These are real and good feelings, and you have to discuss and manage them as best you can.

Detailed Plan

Be sure you have a very good plan for the day you will actually lay people off. Including mapping out each manager, employee, room, paperwork, timing, etc., and also for contingencies and problems, including and especially emotional breakdowns, as they are likely (and slow things down).

You might talk to a few non-manager people in advance, to get a pulse of the people, to plan the best approach to folks who will take it hard, and help map out who should have the actual layoff 1:1 with specific people.

In smaller companies, a person’s manager may not have hired them nor have the best relationship for this process. Perhaps the CEO hired them, or another teammate should break the news, maybe 1:1 or with their manager. It’s very important you choose the right person to lay them off and try hard to avoid having HR take this role, except for perhaps the newest or lowest level staff.

You may also want to confidentially reassure the most important key people so they are not surprised, including messages that they will form the core of the company going forward. This is delicate, of course, but can help stabilize and manage the fallout, depending on how it goes.

Layoff Day

On the day, there are various ways to ‘start’ the process, such as a company-wide meeting, saying in effect, “We are not doing well, so we have to lay off people. It will affect some of you, you’ll know when your manager comes to get you.”

You might also outline any standard packages & processes during this all-hands. Plus, something like “If we’ve not come to you by 2pm, you are not affected.” You should surely add how much support and love everyone should give those that are departing.

Then it’s really execution, fanning out and talking to people, usually in meeting rooms, offices, cafes, etc. HR or admins will need to track schedules and timing, plus the status of any docs, access, or other items that need to be managed. Remote employees pose additional challenges, though I have limited experience or advice on that.

For documents, keys, formal processes, etc. I strongly suggest you separate those from the 1:1 talks. Break the news quickly, deal with initial questions, and let them go back to their desks to process the news, chat with folks, etc. Then in an hour or two, ideally after lunch or near the end of the day, HR and managers can follow up with paperwork. Pushing papers in their face during the 1:1 is a very bad idea.

Reactions & Emotions

You’ll get all sorts of reactions and emotions. People will be angry, sad, disappointed, and/or shocked. Some will worry about the company and profess their love for the firm, and I’ve even seen folks surprised at getting any compensation at all.

Others will wonder what fools led them and the company into such a mess, and blame you, management, etc. Some will be terrified for their own future, their kids, paying the rent, etc. and you should think seriously about how to best help them, perhaps confidentially on a case-by-case basis.

Dignity

A word on dignity and timing. Please do not be the company or manager that escorts people from the office, has someone clean out their desk, or demands keys and badges back during the meeting. Do NOT do this, as it’s scummy behavior and in addition to being wrong, will be very much noticed by the remaining team.

Of course, there may be some sensitive systems or access to manage, but the vast majority of people were well-liked, trusted, honest people before you laid them off, and they remain so after you tell them they will be leaving.

Let them finish out the day if they wish, hand off what they can or should, and most certainly say bye to their friends and co-workers, in tears if they want. These are very important things to get right, for them, for you, and for the rest of the team.

In the end, in my experience, the process goes surprisingly smoothly, and the potential problem people were never difficult. The hardest to take were the happiest people who really wanted to stay, for the team, the mission, and the founders. It’s really, really hard to cut them loose, for that’s how it feels, that you are casting them adrift.

Afterward

You should plan for the day after, too. That probably includes another all-hands meeting, or in smaller groups with managers and/or the CEO. Cover what happened, why, and your thoughts on how it went.

Also, be sure to get their feedback and feelings. And outline the path forward, including new plans to avoid doing this again (not that they’ll necessarily believe you, but try you must).

In the end, this is one of the hardest things any leader and management team has to do. Of course, you should avoid it any and every way you can, but if the unavoidable becomes necessary, manage it the best you can, treat everyone with dignity and respect, help all you can (especially the most vulnerable), look to the future, and do your best for everyone.