Ask HN: I'm going to have to lay people off, and want your advice
Throwaway for obvious reasons. I'm probably going to have to lay off several dozen people, which I've never done before. Needless to say I'm not looking forward to it. What advice do you have to make it as decent as possible both for those who will be laid off and those who will remain?
(Probably helpful if you note whether you are someone who has been laid off well or poorly, someone who has laid people off, or just have thoughts about it.)
143 comments
[ 10.1 ms ] story [ 439 ms ] threadFirst off, if you're going to do layoffs, make sure it's one and done. This means, probably cutting more than you have to so that you don't have to keep making layoffs in 6 months, etc. The quicker you can get back to hiring, the better it will be for morale.
Layoff your lowest performers first. If you don't, then your top performers will leave you, and you will get crippled within less than a year. Don't do something like ask everyone to take a paycut, because it means that your top performers suffer just as much as your low performers. You should get rid of your low performers quickly.
Try to give as generous a severance package that you can. And meet with each of them face-to-face if possible, but with several dozen it's probably impossible.
Make it quick and let them leave with dignity. That means let them say bye to their friends, and making sure that every single question they may have answered. COBRA, unvested options, Unemployment benefits, etc. Personally I wouldn't escort them out or lock their accounts unless you think that they are going to cause problems. Hopefully they won't.
Do all the layoffs before lunch. Have a meeting with the rest of the company after the layoffs, after lunch and explain why you had to do it, and explain your plan to ensure that it doesn't happen again.
Never tell the employees how YOU feel. No one cares.
I agree with @steven2012's feedback. To add a few things:
1) I'd recommend you work with your attorneys to draft up a termination agreement that includes a severance package. I'd also recommend you cut a check and include it with the letter. When you sit them down to talk them through the agreement (individually), you can present check to them and ask them to sign it and take the check. You don't want to force them into signing anything, but you also do want to try to get it done cleanly and completely for the sake of the business moving forward. If they hesitate or say they want to review the terms later, or with an attorney, don't push it. But do make the check large enough that it'll be easy for them to sign on the spot if at all possible -- you want to treat them fairly and not have to deal with loose ends later if you can help it.
2) It's extremely important to take the "one and done" deeper cut approach. There's nothing worse than everyone wondering when the other shoe is going to drop. I'd recommend you take the remaining team out to lunch and make sure they know that they are safe -- and you all have to rally together to make the company a success.
As an aside -- the only regret I've ever had is waiting to fire people that I knew had to go. Learning to be more aggressive about moving under-performers out faster has been one silver lining from the whole process, over time.
Good luck. It's a terrible foreboding feeling going into it, but you'll fee a big sense of relief afterwards, and if the employees you're letting go are unhappy in their jobs, they may end up thanking you later for helping them move on to find something they loved more.
As for getting them to sign the same day, don't drag anything out. Just get it over with so both parties can move on. It's a terrible experience on both sides (unless one side is an asshole or doesn't care about the company.)
In contract law, the general term for that concept (i.e. each party being required to "give" something for the contract to bind) is consideration, and it derives from common law.
For example, if I contract you to build my company a web app, my consideration is the agreed payment, and your consideration is delivery of the web app as agreed.
This is also presumably why those tech CEOs who work for a "$1" annual salary aren't just doing it for $0 instead. Because, traditionally, for an employment contract to be valid, there must be consideration from both parties (the employee gives their labour, the company pays the salary).
The exact rules depend upon the jurisdiction, and nature of the specific situation. Some legal systems don't even require it at all.
https://en.wikipedia.org/wiki/Consideration
It is true that you should get them to sign an agreement that contains, among other things, a "general release" that basically says that they promise not to sue you for any reason. It is also true that to be enforceable, you must give something of value (i.e., "legal consideration"), and the severance pay is usually the principal consideration for such an agreement.
I would be extremely cautious, however, about getting someone to sign quickly. It seems to make sense on the face of it (get them to sign away their right to sue before they contemplate getting an attorney). But there is a flip side that no one is mentioning. If you shock someone by calling them into your office and telling that they're losing their job, put a legal document in front of them that they probably won't completely understand (it's going to have a laundry-list of statutory provisions that they need to expressly waive), put a check in front of them and say "here, sign this now!" you're going to unnecessarily jeopardize the enforceability of the release. The ex-employee's lawyer will argue that it was signed under duress and without sufficient knowledge, understanding and consent to constitute a valid waiver of the right to pursue certain claims.
Also, depending on the worker's age, there might be additional complications. The Older Worker's Benefit Protection Act applies to employees over 40, and requires the terminated employee be given 21 days to consider the release and 7 days afterward to change their mind. (The 21 days increases to 45 if there are two or more employees being terminated.) Although this particular statutory requirement doesn't apply to those under 40, it underscores the notion that allowing someone to consider a severance agreement for some amount of time and have the opportunity to discuss it with their own attorney if desired are both good things when it comes to enforcing the agreement. How long you give them is a matter of balancing numerous statutory and common law considerations (both state and federal) with the goal of getting them to sign quickly, and there are avenues, regardless of age, for their attorney to attack the validity of the release if they sign it without properly understanding and consenting to its terms.
I should also point out that severance agreements should always be prepared by an attorney. There are numerous considerations that vary state-to-state; there are specific waivers that need to be contained in them; there are different rules depending on the number of employees; possible notice requirements (in which case the severance might be designated as compensation in lieu thereof); rules about timing of final payments; whether or not benefits are paid out; etc.
I'm not sure exactly what accounts you have in mind, but general I would lock them all, no matter what. You may trust them to not retaliate, but do you trust them to have chosen a password that they didn't use anywhere else and didn't get keylogged and didn't give to phishers, and that their account will not be compromised in any other way?
Maybe email is tricky, since they could potentially have some personal stuff they want to retrieve. Perhaps the helpdesk can assist them in that case; or give them 5 days or so where they can still access email.
(If it matters, I have zero experience in this, just an interest in security.)
Edit: I now see you probably meant just giving something like the rest of the day on the lock, if you trust them.
You would obviously close off all credentials once they're out the door.
My current company just had layoffs and most people found out when HR left the firing lists sitting face up on top of the copier to go to the restroom. I survived and I'm still trying to figure out if I want to bail too. I was pretty upset that as recently as 3 weeks ago we were asked to help recruit friends for a senior java architect position, and one of the laid-off engineers had only been at the company 7 weeks. It's just not right to fuck with people like that.
Layoffs come in rounds. Just because you survived one round means no guarantees on the second or third rounds.
In reality, it causes few problems - people likely to do something malicious probably already did it behind your back anyway.
(That was a fun day...)
I'd rather leave a company knowing that my accounts were locked, than not. If it's locked, I have more confidence that I wouldn't be accused of doing something seedy when packing up.
I'm not sure if I agree with you on the saying the good byes. Linkedin is a bit better than that. The worst thing you can do is send them back to their desk to backup and make the announcement while they're packing.
They OP may not have the ability to nullify employment agreements. They may have the ability to not enforce them post layoff.
Not trying to be heartless here, just trying to point out that there are two sides to all stories, including tragic ones.
> You don't want to force them into signing anything,
Actually, you do. The more you give the employee a chance to mull over the whole thing, the more likely they are to lawyer up and hit you with a wrongful termination lawsuit. As the employer, I'd go one step further and if the CFO has allowed for a severance package of n dollars, I would initially offer them 90% of n if they sign right away and if they don't, give them the full n. Anything to get things settled right here, right now, in the room.
Most important is probably knowing the company and the individual you are dealing with. It's easy for people to misconstrue aggression as anger, which may or may not help your case.
This is really important advice. Telling them how you feel trivializes their loss and pain. It is also extremely selfish, because it has nothing to do with making their situation better it has to do with you trying to selfishly overcome your own guilt. Only a jerk would do that when someone just got fired.
It's fine to express how you feel about them and working together, but not how you feel about firing them.
Hopefully you have a corporate policy regarding this. Ours is to lock access to accounts within 30 minutes of notification. It's just the best policy to have a uniform approach that is applied evenly.
For emails, have it autoforward to an IT monitored, or your own account. Occasionally you may have an employee who needs access to something via an account that is tied to their work email.
As much as it sucks, you have to do this asap. While most people will behave most of the time, getting laid off is one of those times where everything goes a little out of focus and people make dumb decisions without thinking things through. They may do it in a way that only reflects on them but quite often it can reflect on the company and sow more doubt and fear in the organization.
I think the most important part for going forward is the first meeting post-layoffs. Rumors will be forming, tensions will be high, and some people will still be texting with the friend you just fired. This will be the best - and potentially only - time to kill some of those wild ideas before they become rumors.
A common mistake when winding back a company is only pulling it back to break-even. Eg, 'Our revenue forecasts show we can cover 50 salaries, so let's cut back to 50 people.' There are two problems with this - first, if your forecasts are too optimistic, you will be forced to do another round of cuts and the team / clients will start fearing a death spiral. Second, cutting a business back to break even leaves you with no spare cash flow to invest in future growth - you risk stagnating. Better to add an extra 10% to the layoffs now than risk the remainder of the business.
From there, the decision about who to let go is sometimes obvious (you might be dropping a product line, have an underperforming team, or some stand-out low performers). Do what you can to re-deploy your top performers elsewhere within the company - you'll want them, and their advocacy, moving forward. Where it's not obvious, and you can't get guidance from team leaders etc, accept that it's going to be partly a crapshoot where nobody wins.
How you communicate the decision and the reason why is critical. steven2012 has covered this well elsewhere in the thread. Be honest, take responsibility, and be positive for the future you plan to create. Good luck.
Just make clear to people who are being laid off the reason.
Essentially people will feel a bit happier knowing that it wasn't them who screwed up.
Chances are they already know it is coming, if work is slow and not coming in or the burn rate is high and you have run long on funds then they will be expecting it. Have a very clear plan to explain to those that stay, as to why the ship is righted now and how you plan to survive. Plan to loose at least a few of your best guys, if you loose one, use his/her salary to give the others a raise or you will lose them too.
Also cut the pessimist over the pragmatist or the optimist. In a layoff environment the pessimist will kill your company moral. If you got a guy that is say 15% better than another guy but he is a pessimist and the other guy is an optimist, keep the optimist. That being said, trim dead weight if they are just not skilled let them go not matter their outlook. As others have said, look to trim, trim more than you need.
Having gotten laid off on a Monday morning at 10AM after spending the whole weekend working in anticipation of finishing a major deadline that day, I'm not sure I agree. I'd rather not find out though...
Worst for the employee being laid off, best for the company doing the lay off.
Reddit recently used that approach to announce Ellen Pao's "resignation".
If you can't do that, honestly, it's all just empty words and bullsht in my opinion. Someone screwed a lot of people by over hiring and mismanagement. Hope whoever was responsible for that is first to go.
Later on however the company announced 3 more rounds of layoffs, each having less and less severance and time before leaving. It would have been FAR better to cut many more people during the first round so they could have all gotten the same severance instead of later groups being essentially screwed.
This has some consequences, as after 90 days they lose ISO status and they'd lose all the tax benefits.
Anyways... Half the company met in one place (and they got let go) and half the company stayed.
Do a single cut. The second cut prompted people to lose faith in the company. It didn't matter what the CEO said, most people simply believed that "this was it". Many started to look for other jobs. I believe the first one we called the "bloody Tuesday" and the second one was a "bloody Friday". It became a permanent joke/non-joke that whenever a big meeting was called, people were going to be let go. Or whenever someone talked about "strategy", it meant cutting departments. Not a good thing AT ALL.
Don't be a dick about it. From what I know, the people that got let go got a good severance and references. Both good things.
Make sure the morale stays up. Many of us had issues dealing with it. Productivity dropped, faith in the company, etc. Actually, the worst part was watching higher up people stay and not be affected, and slack off on top of it.
Nothing worse than seeing someone who makes 6 figures play Mario Kart in the break room for the whole day a few weeks after all this happened.
What DID help was that us lower folk started playing video games over lunch. It fostered new friendships, and helped us get productive again. But that got cut as well after people complained (to this day, I don't get it).
Having said that, if I were about to get laid off there are some things that would ease the transition and make it more bearable. First worry is income. If you could guarantee a months severance, that would go a long way. Second is health insurance. If you could have all those resources prefigured out by the time I left, I'd be much happier. Third is promise of future income. If you could have recruiters on standby so that if I could make the choice to begin the job search, it would be great. Lastly, this is sorta extra credit, but experiencing job loss is quite tramatic. You can make counselors / work therapists available to be there in the time of need.
Basically what I'm trying to say, if you are going to let people go, make the only thing they have to worry about is getting over the shock of getting let go. That is unavoidable. But if they know they are being taken care of and empathized with, they'll get over it quickly.
The deal was basically: "You're relieved of duties today, but you stay on the books and draw salary for [1-2] months, after which you'll be terminated with [N] months of salary as severance. Obviously you're welcome to look for other jobs, internally or externally, and if you find a new job and don't want to wait out the 2 months, you're free to quit early (foregoing severance)."
It felt waaay better than being escorted out with [N+2] months of severance, and the cost to the company is the same (or cheaper if some people wind up forfeiting their severance).
I've been through a 'silent layoff' at a startup, wherein most of the staff just stopped getting paid. We were funded by PE; the leadup to the separation was several weeks of accusations back and forth re: lying about available funds vs. mismanagement of granted funds. The company offered no severance and fought my unemployment claim. I was kind of relieved when it was over, but I would not recommend handling it this way unless you just don't care; it's been years but I still basically hate everyone involved.
I've since survived 3-4 rounds of layoffs where I'm working now. We've had it most of the ways you can have it: mass meeting, one on one w/ HR rep, nominated out-of-dept managers shepherding individuals out of the building, rent-a-cops in the office, etc. In all but one case, the departing employees were given a couple of paychecks severance + placement assistance and IIRC in at least one case remaining employees were offered grief counseling.
I don't think I could ever enjoy being laid off, but IMO the right way in a multi-person separation is to have one meeting with everyone, be honest about what's going on, and give them whatever you can to soften the blow. Unless there's a good chance your funding situation is about to improve, this means you should do it a little earlier than you think you need to so that last x days/weeks of salary can be severance instead; IMO people are not going to be significantly happier about being laid off if it happens 2 weeks later. If you've got contacts at other places and you can give references or help place, do that. You probably don't need police to escort people out, but you should get the departing employees out of the building w/ relevant credentials and badges revoked asap. Don't let people mill around, it exposes you and gives them more opportunity to vent in ways both of you will regret; I've seen where people were let go, then went and deleted things from file servers or otherwise destroyed property prior to leaving the building.
This and a few other things really makes one not want to work for a startup again.
-Getting a month's severance pay. Personally I wish I had gotten more, but it greater than zero so I couldn't complain all that much(sorta, I wouldn't have been happy if it was just a few hundred or so).
-Getting a month's worth of health coverage. My internal doomsday clock started ticking for getting a new job, and having that health insurance gave me some comfort knowing I wasn't going to be completely screwed if I were to be slammed by a hauling truck the moment I left the parking lot.
-Being reassured it wasn't for performance reasons, especially since I had just gotten a poor review several months prior(the severance contract specifically stated this, and said I was eligible for re-hire). I wanted to leave, and I'd never reapply anyway, but it was nice to do so on good terms.
-Getting an offer for a reference during the transition. My sorta-boss said I could use him as a reference before I even asked, I didn't need it but I really appreciated it.
-Getting some time to talk with now-former-coworkers, rather than being whisked out of the building. I was annoyed that my PC access was immediately disabled and my keycard disabled(let me take my stuff to the car, I need multiple trips, wtf), but getting closure with people(along with emails) more than made up for it.
The one thing they did that pissed me off was that they did it on a Monday morning at 10AM after I had spent the whole weekend pulling overtime for them to finish up a major project deadline that was due 5PM that day. It felt like a huge slap in the face to put on your A-game for the day, only to be dropped after sacrificing personal time for the company. Despite all the rosy things I said, I'm still bitter about that.
It sucks to be in this position and I wish you, and those who'll be laid off, the best of luck.
Do it as soon as you can. If you know now, tell them now. Every day you don't tell them is a day they're potentially missing out on another job.
For yourself, try and keep some perspective. Things happen. Life moves on. People recover.
Source: I had to tell 22 people that the company we were running had just gone in to administration and today was the last day. We only found out ourselves the day before when our "accountant" (grrr... anger still remains towards that one) revealed herself to be less than competent. It was horrible, but me and my colleagues just sat them down and laid it out straight and said we'd do whatever we could to help, and that was that.
My second suggestion is to go out of your way to be the best reference these people have ever had. Write letters of rec, tell them to list you personally as a reference (with your cell #), etc. And if you can, use your network to help them find new opportunities.
For those who remain, just try to be as honest as you can. If their jobs are possibly insecure, let them know as well.
Best of luck, I know this is hard.
My advice is first, realize you're not going to be popular. Treat people with dignity but don't worry too much about how they will take it. They're going to take it poorly. They're going to be upset. If some of your employees aren't, then that's a bonus. With this in mind, don't let your process or productivity become unnecessarily disrupted and be very careful in making concessions.
With this many people, do it all at once. Don't make people wait in agony for hours or days waiting to see if they'll get called in next. The specifics on how to do that will depend on the structure and size of your company, but do not allow for suspense.
Like others said, treat the employees with dignity and offer a reasonable severance as far as is possible. This isn't about preserving your relationship with them, it's about being a decent human being and making accommodation to ease a large transition like that.
Good luck. Like I said above, don't overthink it or worry about preserving your employees' opinions -- just behave in a manner that seems both reasonable and decent to you and be satisfied with that. Making it fast, moving forward with resolve, and appearing like you know what you're doing will help comfort the remaining employees to whatever extent is possible.
- http://www.lhh.com/career-transition/career-transition.aspx - http://www.risesmart.com/outplacement
- http://www.lhh.com/career-transition/career-transition.aspx - http://www.risesmart.com/outplacement
https://www.manager-tools.com/map-universe/organizational-ev...
I like Manager-Tools because it is step-by-step and actionable. Does not say "think out of the box" (how?), it gives you exact words that have worked for 1000s of companies.
BTW, performance based layoff list might be a legal issue in some case, for example when the reason is workforce reduction. Without a good lawyer don't go there...
I would advise telling everyone remaining you are "over cutting" so they know that another cut is not coming in the next couple of months if things don't turn out the way you hoped. Other than don't be an asshole and provide as much support for those cut as possible and don't use weasel words like "right sized" or "let go".
You just might, and you'll lose all credibility with your employees.
I do think you should over cut and then tell the remaining people that you have done this so that you can say you have done everything in your power to avoid doing it again. If you need to cut 50 people to have a good chance of surviving then cut 75 and tell everyone remaining why you have done this. One and done is critical.
Some transparency into why the decision was made can be make it easier to move on. Generic reassurances that "it's not performance related" are not always helpful, particularly because that's so often bullshit.
It certainly was performance related to the extent that if the person being laid off was doing twice as much good work for half as much money then it's unlikely they'd have been let go. It's a hard thing to talk about, I know, but that's what people want to know when they ask why.
That way the person let go knows whether and how to adjust their performance going forward at their next job so they're more likely to survive that company's inevitable layoffs.
>A lot of people who get laid off want to know why them and not a peer. Was their peer a better performer at the same pay grade? Or was their peer doing the same job for less money? Is the company looking to eliminate senior roles? Junior roles? Or was the selection completely random?
Hm. So, as an employee, I wouldn't believe any of those answers, were the boss to give them to me. As someone else said, "Severance... everything else is just words" - but it is important to remember that most people are not as cynical as I am.
As an employer, though, that advice is interesting... because really, it seems kind of shitty to say "I'm sorry bob, but it turns out that Joe is just three times more effective than you are. I think he's just smarter." which is what I'd say if I really was giving the unvarnished truth. I mean, a lot of times, there isn't really much Bob could do about it; he's just not as smart as Joe is; it's not really his fault.
but my instinct, when I don't know what the right thing to say, is to just tell the truth, so your advice appeals to me. but it just seems like this is one of those 'does my butt look big' situations where keeping my damnfool mouth shut is the best option.
Is this what you would want to hear? How would you feel if the boss told you someone else was three times as effective as you were and you disagreed with that assessment?
>That way the person let go knows whether and how to adjust their performance going forward at their next job so they're more likely to survive that company's inevitable layoffs.
As an employee, I say that you always want to be in the first round of layoffs. The severance is usually best at that point, and even if the company did a good job and fired the people who were, say, half as productive, those people did some work, and that work still needs to get done. Guess who gets to do it? You! the "Lucky" person who didn't get laid off!
I've never gotten the axe in a layoff... I've been fired, but that's a different thing. More than once I've ended up quitting after the first or second round of layoffs because the company expected me to work twice as hard for the same money (and no possibility of a raise) with half the support I had before.
I think it can be done in a way that is not so personal while still being useful. Instead of saying, "Joe gets 3x as much done!" You can simply say, "Given that the company is facing hard times, we looked at performance and pay of everyone at the company and kept the people we felt were the highest performers at the least cost."
I think that would get the message across without singling any specific individuals out.
Hm. So the information you want is that it wasn't random or based on seniority. It was performance based, even though your performance wasn't low enough to get you fired outside of a layoff.
Also, you just saw what happened on Reddit. Firing someone who is in contact with your customers can backfire in ways way worse than a discrimination lawsuit, if you screw it up.
so... at least when dealing with my own stuff, while I'm sure my insurance company would prefer I follow your advice, it's probably in my own best interest to do whatever it is I can do to avoid pissing off the outgoing employee, even if it does give them more leverage if it comes to a legal fight.
I mean, I'm not sure if the commentor I'm responding to is right or not, but getting sued for wrongful termination is pretty far down the list of things you should be worrying about when you fire someone as a small company.
- Managers should tell their direct reports personally, rather than delegating to someone else like HR. I still remember, unfondly, when one manager didn't want the burden of delivering the bad news and found someone else to do it.
- Give the people who will be laid off as much time as possible to send work emails, talk to colleagues, get taken to lunch, etc. As <steven2012> said, let them leave with dignity. Your employment agreement already prohibits misuse of corporate resources and criminal law prohibits theft of company property; as a general rule there's no need to have a security guard hovering over a desk.
- Write a letter of recommendation if your corporate policy allows and your employee's performance merits it. Give it to them in printed form and PDF. Don't merely offer to do it if they ask.
- As many others have said, do only one round of layoffs. Company morale can survive a single round. It may not survive repeated rounds, with nobody knowing when (and where) the next axe is going to fall.
- Communicate honestly with your remaining employees to the extent policy allows. The best managers will admit it if they don't know something.
If you really care about making it easier for the person being fired, this is a MUST. I have been on the opposite end where my employer simply said, "write something up and Ill take a look at it." Don't Do That. It is the same thing as telling them "you are dead to me, and aren't even worth the decency of two minutes of my time to reflect on the good you have done for my company, and the extra minute to think of a way to help you move forward."
Want to be decent, write the letter of recommendation in advance. The gesture will go a long way in keeping bridges from being burnt.
On the note of burnt bridges, I know of a nursing home company in Colorado that layed someone off in a not so courteous way and 10 years later she became the head of nursing home licensing in Colorado and the moment she found the first excuse, she revoked their license on 20 nursing homes, costing them tens of millions of dollars.
Perhaps this is splitting hairs, but I see a round of layoffs as something considerably different than being fired. Net-effect the same, but firing someone has a the connotation that it was for cause.
As long as some people are let go and others keep their jobs, people will assume there was a reason they got let go...not just because the company had to make layoffs.
Short of committing a deliberate fire-able offense, being let go as part of a layoff feels exactly the same.
* Unlikely to get a reference.
* Unlikely to collect unemployment insurance.
* Unlikely to get severance.
* Unlikely be rehired in the future.
Yes it may feel like the same, but they are very clearly two different things.
Um, are the people she was affecting by doing that, actually the same that did the non-courteous laying-off 10 years ago? (or even perhaps/possibly deserving by continuing some status quo?)