Reduction in Force Toolkit

Linked below is a (free) reduction in force toolkit, purpose-built for startups facing the necessity of layoffs as a result of the COVID-19 crisis. This includes ~20 templates such as separation agreements, communications, logistics plans, manager training, selection scoring, etc. Here is a link to my blog post on this topic, which allows readers to download a zip file containing all resources.

Businesses around the world have been impacted by this crisis. "Shelter in place" orders have affected more than 100 million US citizens. Schools are closed. Supply chains have been disrupted. Normal commerce has been choked off and revenue forecasts are in disarray as businesses try to predict the duration and intensity of the disruption.

Although the US government has stepped in to offer economic stimulus and support for small businesses, many companies are faced with the necessity of rapidly reducing their cost structure to maintain the health (or even the life) of their organization.

While most startups expect to go through a period of financial losses, this sudden contraction in revenue and tightening of capital is a shock to the startup community, resulting in dramatically increased cash burn and decreased runway.

Headcount and related costs (facilities, contractors, temporary labor, payroll taxes, employee programs, etc.) account for more than 80% of most business expenses, typically even higher in the technology industry. Therefore, it is impossible to meaningfully impact the cost structure of most businesses without adjusting the rate of spend on people.

This reduction in force toolkit provides frameworks and templates for businesses that have been forced to reevaluate their staffing levels during this time. While very large and complex organizations will require much more detailed plans, this toolkit is specifically targeted and somewhat simplified for organizations that have:

• ~100-1000 employees
• extensive worker distribution across multiple locations
• a need to meaningfully adjust their staffing levels (not just implement a hiring freeze, delay/discontinue bonus payments, or other less severe actions)
• limited Human Resources infrastructure and minimal leadership experience with organizational realignments and staff reductions

I am deeply saddened that many organizations are forced to contemplate job eliminations and furloughs to make it through this period. However, when such decisions are required to ensure the survival of a business and the continuation of good jobs in the future, I hope this toolkit will help leaders take appropriate steps in a more timely, more effective, and more caring manner.

RIF Toolkit folder on Google Drive with publicly viewable & downloadable files

Best wishes,

Andrew Bartlow

www.seriesBconsulting.com

Caveats:

*These templates have been built with legal and compliance requirements in mind, but individual circumstances will vary. Therefore, please review all employment actions and associated documents with employment counsel in advance of implementing a reduction in force.

**I encourage businesses to do as much as possible to support employees who are affected by job losses. including income replacement (through severance), health benefits continuation, support finding a new position, etc. The way you treat the people as they leave your organization has a deep and lasting impact on the perceptions of those who remain, and those you may want to do business with in the future.

***While these templates were prepared with layoffs or job eliminations in mind, there are a LOT of details still "in flight" regarding furloughs, work sharing, tax credits, and enhanced unemployment. I suspect that furloughs and work sharing arrangements could end up being advantageous to many employers and their employees - and plan to offer guidance about how/when to use which tactics, once more details are available.