Taking the Gloss Off: Lessons From Recent Corporate Layoffs

On the 7th of December last year, Better.com CEO?Vishal Garg?started trending heavily on social media after he sacked 900 of his employees over a Zoom call. Yes, that’s right, sacking 900 employees on a Zoom call! Apparently the board was happy with his decision.

Personally I was appalled when I read about it. To me, every CEO and top executive has a dual responsibility. On the one hand, there is the responsibility towards the shareholders but on the other, there is also the responsibility towards their employees.

An employee gives much more than 45 hours of their week to the company. In return, there is an expectation that the organisation will look after the employees interests, and not play fast and loose with their careers. In times of uncertainty like what we are living through right now, a regular paycheque is essential not only to keep the home fires burning but also to service various loans and mortgages that most working couples struggle to pay month on month. A sudden disruption of this steady income can be quite devastating.

On Friday I came across an article in Financial Times about the Emily Weiss, the CEO of Glossier who laid off more than 80 employees. The reason for laying off a third of the company's corporate staff, in her words: "We got ahead of ourselves on hiring."

"Over the past two years, we prioritized certain strategic projects that distracted us from the laser-focus we needed to have on our core business: scaling our beauty brand. We also got ahead of ourselves on hiring. These missteps are on me."

As a one-off case, that might have been even acceptable. But when you look at the company's recent history, and note that it had closed down three stores and laid off nearly 200 employees in New York, Los Angeles and London just over a year ago , then it ceases to seem like a one-off incident and more like a serial offender.

2020 and 21 have been tough years for most businesses. A company in skincare and beauty products was bound to experience a loss of business when most of the world were cooped up in their homes. Like everyone else, they too would have been taken by surprise by the first round of COVID. But for a company in this industry expanding ambitiously during the second wave of Covid seems foolhardy at best.?

One of the primary drivers behind me moving to Bangalore around 25 years ago, was that previously I used to work in a financial services company and have been asked to fire a couple of investment banking executives for no fault of their own at a time when investment banking was in the doldrums. In comparison, pharmaceuticals and biotech to which I moved subsequently was a much more predictable business. The company's pipeline gave a good indicator of the need for expanding either the manufacturing facilities or the sales force at least a couple of years in advance. This predictability ensured that we did not go through cycling phases of hiring and retrenchment. Perhaps it is also the reason why I never worked in the IT sector even though I lived in Bangalore for the better part of my career, and worked in three different organisations for before moving on to found RCD HR consulting in 2015.

Key Takeaways

For Employers: You have an obligation to look after the employees interests, and not play fast and loose with their careers. When scaling your company, it is essential to be strategic about it, or risk ruining your employees careers as well as your reputation as an employer.

For Employees: When moving to a new company, make sure you do your research and ensure they have a reputation for being responsible and responsive employers, known for providing a secure working environment.