What we learned from our layoff experience

If we had a do-over button…

The LifeLabs leadership team and I never thought we’d be writing this, but that’s one of the reasons we are. LifeLabs Learning has grown rapidly over the past 10 years, maintaining a 92-96% employee engagement rate and less than 2% regrettable attrition even as we doubled and tripled in size. We take pride in the strength of our culture and our team and our ability to use our strengths to help our clients become more skilled, resilient, and successful, faster. We even got through the chaos of 2020 stronger than ever.

But sadly, we have not been immune to the challenges this year’s economy has brought to us, and we did not create an operating structure agile enough to handle swift downturns. While we have no doubt that the importance of what we do endures, and that with diligent, applied learning we will become better as a result of this hardship (our team, culture, community, and product remain second to none), we have had to face the devastating need to downsize our team for the first time in our history.??

We tried very hard to make our layoff process as thoughtful and caring as possible, to reflect our culture of care. But in that attempt we made choices that had unintended consequences. We felt it was our responsibility to share them (and our lessons learned) with our beloved community in case it helps anyone going through a similar situation. We also hope this can serve as a public acknowledgment of and apology to the treasured members of our team who have been impacted by the decisions we’ve made.

1. Balance optimism with pessimism

• The miss: When the economic landscape suddenly shifted and many of our clients began to experience budget cuts or layoffs, we were too optimistic in messaging to our team the positive signals that remained and didn’t do enough to highlight the downside risk of reduced spend in our client mix. We focused too heavily on how we navigated past downturns successfully, rather than highlight what could be uniquely risky about this one.
• The impact: When things didn’t go as we expected, our team felt shaken by our emphasis on the ways to rebound versus the potential consequences of a longer recovery.??
• The do-over: Prioritize balanced comms. Share scenario plans for worst and best case outcomes where appropriate. Be guided by the Stockdale Paradox: “You must never confuse faith that you will prevail in the end—which you can never afford to lose—with the discipline to confront the most brutal facts of your current reality, whatever they might be.”?

2. Ensure understanding of org health signals

• The miss: We mistook the internal visibility we provide on company performance - which includes daily updates to the number of learners we upskill, client counts, and revenue - as being evidence of our challenges even if we weren’t calling them out explicitly.
• The impact: When we had to start cutting our expenses, many people across the company were shocked. We took for granted that everyone interpreted the available signals in the same way. Also missing was enough if-then clarity. For example — we said that any month we were 20% below our metrics, we’d have to reevaluate our expenses. What we didn’t explicitly say was that we’d consider layoffs.?
• The do-over: Make the implicit explicit, use simple language everyone can understand, provide better metric education and test for shared understanding.

3. Choose instant pain over prolonged pain

• The miss: When it became clear that we couldn’t sustain our current team size, we made the mistake of avoiding layoffs and opting for furloughs first instead. We knew the traditional advice of cutting deep and cutting once. So why didn’t we follow it? Temporary cuts felt kindest to people and most flexible for the business.?
• The impact: After completing an initial furlough process, the team was left with the impression that any needed cost-cutting was complete.?That made the need to move to layoffs just a few months later even more painful for all.
• The do-over: Choose sharp, instant pain over the drawn out pain of fear and uncertainty. We would calculate our run rate for a period of time we felt we needed for recovery plus a significant buffer and cut any roles and expenses we could not very confidently afford. This feels harsh and inflexible but we have learned that it is actually the more respectful choice to make given that people rely on the safety and predictability of work.

4. Choose time to recover over time to prepare?

• The miss: In an effort to create more certainty for our team, we committed to giving 30 days notice prior to any furloughs or layoffs.?
• The impact: In practice, this strategy was a major miss. It caused anxiety for everyone — especially when we shared that we’d be deciding on layoffs but didn’t yet know who would be impacted. Our goal was to honor our team’s request for transparency, but the result was bad for everyone involved. The month during which people waited to find out if they’d be part of the layoff was our least productive and most agonizing ever.
• The do-over: Instead of a warning and preparation period, we’d have agreed on a shorter wrap up period and funded a longer severance.

5. Take personal accountability and apologize?

• The miss: When we shared the news that we’d have to move forward with layoffs, we spent time explaining how past decisions were made and how quickly the tools we had used for forecasting stopped working. We explained and justified when we should have just apologized.?
• The impact: The answers felt defensive rather than helpful and we eroded trust just when we needed to trust one another most.
• The do-over: Apologize.?Full stop.?Leadership should take personal accountability for any decisions made that led us to where we were with as much specificity as possible, an acknowledgment of impact, and a statement of how we’ll change things moving forward. For example: here are things I did or didn’t do that led us to where we are. Here is the personal and business impact it resulted in. I am sorry for [anything you are genuinely sorry for.] Here is what I’ve learned. Is there anything else you feel I’m not acknowledging? Are there any other takeaways you want me to have?

What worked for many of our people

There are also decisions we made and actions we took that Labmates shared met their needs for communication, like regularly scheduled Ask Me Anything Sessions, a Question & Answer document we updated weekly, office hours with decision-makers, rapidly gathering and applying team feedback when possible (e.g. letting Labmates keep their company computers), giving time for people to say “goodbye” after they were laid off, and supporting the creation of alumni community groups to help laid off Labmates.

Parting words

In sum, we have and will continue to be committed to our value of “always be learning” and want to both publicly apologize for letting down our team and share our lessons learned in case they can make things better for others.