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Planning and Managing Layoffs

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Re: Planning and Managing Layoffs

#31

Post by acwan93 »

gk1 wrote: post #16

One more thing to consider as you plan the layoffs: You may be eligible for one (or more) of the loans from the latest relief bill. The loans come with a near-zero interest rate and a big chunk of it may be forgiven.[1] However, there are stipulations related to layoffs and reduced salaries, which is why you should evaluate this option before making the irreversible decision to fire people. [1] Here's a decent summar…

We were considering laying off but quickly decided on pay cuts due to (what currently seems like!) the temporary nature of this and knowing that the relief bill will come. Our projection is that the loan funds should arrive by the pay cycle after our upcoming one.

Like the article and the parent comment mentions, laying off is a very significant and irreversible decision and at least in our case seemed too extreme.

Re: Planning and Managing Layoffs

#32

Post by lmeyerov »

ryanSrich wrote: post #21
taurath wrote: post #17

A bit of criticism - it “normalizes” an 8 week severance as a ceiling - maybe in the high flying startup world but any big company especially with long tenure 8 weeks is a pittance, especially to someone having been there for 5 years. May be worth a note. > While it can sound jarring to say “and today is your last day,” it’s generally better for people because it makes it clear that there is a new normal and it start…

Agreed that 8 weeks is not generous in any sense, especially for employees that have been at the organization for a year or more. Layoffs are different from performance based firings. My rule of thumb for layoffs is mandatory 3 months + 1 month for each year of service. Someone at the organization for 6 years deserves 6 months of severance if laid off. These are standards you have to build into your financial model.…

You may be coming from a very diff place than most startups

In general for startups and if you can afford, max(2mo, 1mo per year). If you are in a slow industry like finance backoffice, good chance many people are 5-15yr and saved vacations, diff ballgame and HN is irrelevant ;-) Collapse is part of the choice of going for startups.

But this is all nonsense right now: super hard for many people to get new jobs right now when not an easy FANG fit. So low severance layoffs right now are pretty career impacting FUs. Can't take the COVID SBA loans and apply it to severance, so not easy. Startups are risks anyways, so maybe time to instead take advantage of the chaos and grow instead!

Re: Planning and Managing Layoffs

#33

Post by tomnj »

paxys wrote: post #8
nilkn wrote: post #4

Just ruminating here, but I didn’t fully understand the hesitance to do paycuts. Of course, I understand that in some cases the financial problem is severe enough that layoffs are the only option. But it’s conceivable that in many cases a simple, say, 20% cut to salaries across the board could be enough to tip the balance. Some employees will immediately start looking for another job, but that seems totally fine and…

Like you point out in your second paragraph, some percentage of employees are automatically going to start looking for a new job and treat their 80% salary as a severance package. Being in a competitive job market, this is going to be pretty much every above-average employee at your company. With layoffs the company gets to choose who gets impacted, and the process is immediate rather than drawn-out. The reality is t…

> Being in a competitive job market

Are we in a competitive job market still? For whom?

Re: Planning and Managing Layoffs

#34

Post by davidu »

taurath wrote: post #17

A bit of criticism - it “normalizes” an 8 week severance as a ceiling - maybe in the high flying startup world but any big company especially with long tenure 8 weeks is a pittance, especially to someone having been there for 5 years. May be worth a note. > While it can sound jarring to say “and today is your last day,” it’s generally better for people because it makes it clear that there is a new normal and it start…

By all means, do more. Many companies thought they would raise in Q3 and have little chance of that now and need to make immediate alternative plans to have a chance to stay in business. If they can pay more — I hope they do.

And on the latter point, as I point out, depends on maturity of workforce and leadership.

Minor last point — I’m sorry to say that if I’m normalizing eight weeks, then I’m raising the norm. You can not like it, and I don’t, but that’s reality. Eight weeks is generous for a startup, or most companies.

Re: Planning and Managing Layoffs

#35

Post by davidu »

Klonoar wrote: post #12

>You can say “I know this is a lot to take in, but you will get through this.” >Do not tell them they will be fine. In general, a very good article, but these two lines really seem contradictory. It might intend to mean something else, but in practice it's pretty much doing what is outlined as a "do-not-do-this". Edit: typos.

I know. I edited that a few times. Didn’t quite get it right. Subtle nuance to “you will get through this” and “you will be fine” I guess.

Not perfect.

Re: Planning and Managing Layoffs

#36

Post by davidu »

thedance wrote: post #26

Here's a don't: don't bring some BS document for the fired person to sign. They have no reason to do so and shouldn't feel pressured to execute something like a non-disparagement agreement, unless it comes with a big checks stapled to it.

I could have and maybe should have added that. Totally agree. They can take it home and review and you should send it digitally anyways so they have a copy.

Re: Planning and Managing Layoffs

#37

Post by davidu »

grecy wrote: post #5

This is extremely useful and well done, easily the best resource for layoffs I've ever seen. I really like that it doesn't hold back. > Maybe they will return to a home country with alternative healthcare options Wow, that's calling it what it is.

Thanks and yep.

Re: Planning and Managing Layoffs

#38

Post by stickfigure »

Klonoar wrote: post #12

>You can say “I know this is a lot to take in, but you will get through this.” >Do not tell them they will be fine. In general, a very good article, but these two lines really seem contradictory. It might intend to mean something else, but in practice it's pretty much doing what is outlined as a "do-not-do-this". Edit: typos.

I hear what you're saying, but I think the difference is pretty important.

you will get through this acknowledges that a significant hardship is being imposed on them.

you will be fine trivializes the hardship; the subtext is "this is no big deal, you worry too much".

Re: Planning and Managing Layoffs

#39

Post by adrr »

Incorrectly states anything above 8 weeks isn't normal. 8 weeks is the min for Cal WARN. When i got laid off during the great recession, i received 11 weeks paid. 8 weeks for WARN and one week for every year employed. Then another one month of pay to give up my rights to sue the employer.

Re: Planning and Managing Layoffs

#40

Post by masonhensley »

jbkiv wrote: post #30

Different point of view: I was a Founder and CEO during the dot com era. The company survived and became successful ($2B revenues today). It may be unpopular, but I will give you a different view, the one from a Founder/CEO. After the dot com crash no VC could figure out the good from the bad in their portfolio companies. I was starting to get conflicting opinions from my board (4 VC’s and me, the Founder). “Become a…

Thanks for sharing, have you written about any other experiences?
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