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Planning and Managing Layoffs

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Re: Planning and Managing Layoffs

#11

Post by triceratops »

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…

Obviously things are different now. But in a good job market where layoffs are due to the company's underperformance, people spared from the layoff are going to start looking anyway. Lest they're laid off in the (nearly) inevitable next round.

Re: Planning and Managing Layoffs

#12

Post by Klonoar »

>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.

Re: Planning and Managing Layoffs

#13

Post by nilkn »

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…

For clarity, my question was a response to the last part of the article that talks about this topic.

I think you’re right that layoffs allow you to take a more targeted approach and retain top talent to the extent that it’s possible. However, really in-demand employees aren’t generally going to want to work at a financially unstable or insecure company, and layoffs would probably be a sign for them to start looking even if they weren’t impacted.

Re: Planning and Managing Layoffs

#14

Post by taurath »

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…

Even a 2% pay cut is basically a big “the company doesn’t value you anymore, best move along.” signal. They can say it’s about cutting costs all they want but you’re the one being asked to take the hit not the company worth millions or billions.

Re: Planning and Managing Layoffs

#15

Post by scarface74 »

nilkn wrote: post #13
paxys wrote: post #8

Earlier quoted context omitted.

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…

For clarity, my question was a response to the last part of the article that talks about this topic. I think you’re right that layoffs allow you to take a more targeted approach and retain top talent to the extent that it’s possible. However, really in-demand employees aren’t generally going to want to work at a financially unstable or insecure company, and layoffs would probably be a sign for them to start looking e…

In 2011, every developer where I was working knew that the company was on its last legs. Management was completely honest with us. We stuck around any way because we enjoyed what we were doing and knew that we would be able to get a job quickly. We were right, from looking at LinkedIn everyone had another job in less than a month.

The people that were left survived three rounds of layoffs.

I know this time it’s different than 2008-2011. But no job is stable. The only hope you have is to keep your skillset in line with the market and to have a strong network.

Re: Planning and Managing Layoffs

#16

Post by gk1 »

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 summary: https://www.washingtonpost.com/business/2020/03/30/heres-how...

Re: Planning and Managing Layoffs

#17

Post by taurath »

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 starts right now

On what basis is this better? You’re opting into socially traumatizing people this way. When you take someone’s badge most people who remain immediately starts to shun the laid off worker. Your respect and trust of them as a person is immediately (rightly) seen as a lie. I’d really like more info on how this is better than allowing people to say their goodbyes.

Re: Planning and Managing Layoffs

#18

Post by crispyambulance »

Sounds like compassionate and practical advice, but nothing particularly insightful.

Having seen the shit-storms of the early naughts, yes, I can say there are worse ways of doing layoffs. Hint: deactivating key cards at lunch time isn't a best practice, nor is dribbling out lay-offs in waves like a year-long "last man standing" game show particularly helpful. Nor is calling an all-hands meeting and having the CEO cry on a theater-sized video projection. But these things are fairly obvious to non-sociopath leaders and companies with a professional HR department.

This is the second essay from a VC concern that I've seen discussing this. It makes me wonder why are VC's giving out this advice in such open-letter forums?

Re: Planning and Managing Layoffs

#20

Post by abraxas »

arvinsim wrote: post #7
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…

Maybe they wanted to do layoff sone employees even before this pandemic. The current situation is convenient for them to do so.

The current situation is the furthest from being convenient in regards to layoffs. No company wants to be seen as heartless during a truly global tragedy.
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