Layoffs are unfortunately a part of most industries, and the technology sector ( or department ) is no different, in fact we are often some of the first to be hit.

The execution of the layoffs ( pun intended ) is the actual delivery of the message, both to those being laid off, as well as those being kept on.  I covered the selection process in a previous post, and will continue this series from here.  I have been using my past experience with various companies, to show examples, but again these are only my thoughts and opinions.

The execution

I will break this portion down into 2 parts, the delivery of the message to those being laid off, and to those being kept on.  Since the message is different, as well as the delivery, they deserve their own description which I will identify as the march, and the hope.

The March

This part is about getting the people being laid off isolated into an office, conference room to minimize the impact of the rest of the people.  During mass layoffs, its common to have the rest of the team called to a meeting while the affected resources are being told the news.

First is getting the person/people away from the masses, this can be accomplished by either walking by someone’s desk and asking them to come into an office, or calling them on the phone and having them come to your office.  The goal of this is to do it as discreetly as possible.  Most of my experiences around this all happened in similar fashion, and were done with professionalism.  It is also important to do it quietly so as to not worry the rest of the staff.  One good idea that i have seen is to have the rest of the team away from their desks when the person being laid off comes back to their desk to collect things ( more on this later ).  All electronic accounts and access should be disabled for this person at this moment.

The delivery of the news should always be done by either an human resources person with the direct supervisor, or if no HR resource exists, the supervisor should have training on what the process should be.  This is to be sure that all laws are respected, questions answered, and information provided.  If some things are neglected to be communicated, said resource has legal recourse against the company, and that can be bad news.

The next important aspect is to be sure not to get into the why me and not them discussion.  Stand by your decision, keep it short and factual.  Do not let the person begin an argument.  Keep the conversation short, simple and straight to the point.  Communicate that the decision is taken and is final.

Following the discussion, each company seems to have their own policy/opinion about letting the person collect their things, or having someone else collect them.  The important part is to minimize the contact this person has with other people for the moment.  This is why having a general meeting with the rest of the employees during this period is a good idea.  I have seen the extremes, of letting say goodbye, to having people escorted around by security guards.  The more sensitive the data, the higher the security risk.  Do not let people access any form of electronics once the message has been delivered, you cannot predict their reaction, and you don’t want them sabotaging your company.

Now let me ask a question, what’s the best policy for dealing people working from home/remote?  This can apply to a remote worker, or someone who had to work from home that particular day due to kids/delivery/appointments, any reason can apply here.  If the person is being let go, do you call them, and then cancel their access while on the phone?  If this person is only home for that particular day, do you wait until they come in the following day, and return any equipment that they may have?

The Hope

This section will address the communication to the rest of the employees and resources working for the company.

The idea here is to communicate what is happening to the rest of the company.  This is to avoid rumors and to maintain the trust the employees have in the company.  The important points to this are to share the high level information,  tell the people the circumstances, inform them that they are not the affected ones.  One important thing to keep in mind, is to not address particular cases with the group.  If a specific question is raised about who/why/etc take that person aside and speak with them, keeping it at a high level, and re-iterate in a general fashion that the choices were difficult and they were made with the company’s interest in turning around in mind.  Do not try to justify, as this will cause more problems.

One issue here, is people that are remote again.  How to inform them, and when to inform them of what happened.  Again ideally, have them call into a conference number so that they can hear the message first hand, if not, depending on the volume of people remote, a phone call or email is an important step.

Most instances this was handled well, if not by the upper management making the call, then by direct managers who called their resources to tell them.  One instance where i have seen a lack, is a person who was working remote that was having a VPN issue, and so they called the help desk, to which the person replied, “please hold while i check to see if you are still employed here.”  This lacked planning and organization, but planning such things is a tricky task at best.

The import thing to keep in mind is the delivery needs to be surgical, no emotion.  It needs to be clean cut, and format.  It doesn’t matter about friends during the delivery, this was done for the business, and you need to keep that mentality.  Planning of delivery is crucial to achieving a “smooth” execution during layoffs.  You don’t want a scene, you definitely don’t want a panic, and taking the proper steps and planning can avoid this.

stay tuned for part 3, the cleanup.

The motivation behind this post is two recent series of layoffs I have been witness to.  One in my former employer’s ranks, and one in my current employer’s ranks.  These are not the first layoffs i’ve seen, I was witness back in 2000~2001 when the dot com bubble burst, and saw quite a few back then, then again recently when we shut down a start up initiative that I was part of.

Layoffs are something that nobody ever wants to live through, but until you have, I believe that you can’t understand that this really is business.  I’m not saying you need to be laid off, but you need to have been in a company that at one point went through a phase of layoffs.  It is a sobering experience that brings you back to reality.

Layoffs consist of three things, the “selection”, the “execution”, and the “clean up”.  The selection is all about how much of our salary mass do you need to cut, where can you afford to cut in your business model, and what are your plans recovering.  The second part to this, is how do you execute the layoffs, meaning communication, timing, communication to those being laid off.  The third part and potentially the hardest, is the clean up. How do you turn around and motivate those left behind, and how do you establish an action plan to get back on track.

Before I go on, I would like to put out this disclaimer, I am not an HR person, or HR consultant, and this is my opinion and experience only.

The Selection:

Layoffs are usually the measure taken after a company has gone through cost cutting, as this is a tricky one to get right.  I won’t talk about discovering the magic dollar amount or formula for figuring out how much the company needs to reduce their workforce by, that is unique to each company and reflects revenues, costs, clients, etc.  What I will discuss, is the selection of resources, roles, etc specifically around IT and technology companies and or departments.

When selecting the resources you want to cut, the first and easiest one to find, is the “dead wood”.  The resources that have been “coasting”, the ones you couldn’t quite justify in firing, but were obviously under-performing.  Next, are those that are redundant or obsolete by another person.  Following this is having 2 people do single roles, that can be accomplished by 1, not saying this is an ideal in the long term, but then again is your going through layoffs ( and not shutting down the company ) you are trying to turn things around.  How do you choose which of the two resources to keep in this situation, the one who has the most to give back to the company, the one who is the best investment, or the one who has no other option, since they are unlikely to quit after the round of layoffs if kept.  Once all the dead wood, or expendable resources are gone, how do you move into the next trimming?  Philosophies vary greatly at this point, as does execution.  Some theories go along the lines, of what positions are hardest to replace ( which ones will we have the most trouble filling when the company turns around ), these tend to be your “Subject Matter Experts”, the people that know every detail of your business, not just your company, but the competitors, the trends the clients, etc.  Next depends on the bus factor of your technology, if you have a very low bus factor for something, then you need to identify the people that you can’t lose, the people that would hurt to lose, and those you are  OK with losing.  Because you can’t kid yourself, layoffs will instill volatility, and some of the people you choose to keep, will be looking elsewhere for new jobs.

Once the easy parts are done, now comes the harder part, when you still need to cut.  Do you go for the biggest salary? the least experience? the person nobody likes? the person everybody likes?  I’ve seen it handled different ways and have had my hand in a couple of those decisions, so I can say it’s not easy, but the absolute worst decision you can make is making your choices based on personal relationships.  It may seem like a good idea at the moment, “i can’t layoff this person, because they are my friend, and they won’t be my friend if they are laid off”, but things like that become obvious over time, and it will come back to haunt you.  Your friend, should understand that it was a business decision, nothing personal.

Example 1:

I was recently witness to a layoff in one company, now I said witness, I don’t work there, nor was I involved in any of the decision making in that process, so take this as the view from an outsider.The company is a Small to Medium sized enterprise, less then 100, but more than 20.  After the series of layoffs, they have about one manager for every worker, in fact they have managers that have nobody to manage.  They have close to ten account/project managers to manage less than a handful active accounts, some front end developers/integrators with nothing to integrate, these are resources they decided to keep.  People laid off were some quality assurance/quality control, some database developers.

Lets break this down a little bit, some of these choices seem very wrong to me.  If you are facing layoffs, you would cut everything that was non-essential, and what isn’t required, and keep the resources to get me back up to the glory days.  Do I need so many account managers for a couple of accounts? or can one good account/project manager keep me afloat for a couple months.  Do I need a team of integrators, who have nothing else to do but look busy or do I need a good developer who can do integration if needed?  What choices can I live with when facing downsizing.  What is the best bang for the buck?  What makes money vs. what costs money?  Do you try to please all your clients, or take the time and really focus on those that will bring you the most money.  I read Tim Ferris’s “4 hour work week” a couple months ago, and one of the things is advocates is fire your most troublesome customer.  The one that costs you most of your time effort in exchange for very little orders, facing layoffs, I believe that you need to look not only at your salary expenses, but where are those expenses going.

Example 2:

Now a second layoff experience i’ve recently lived through, was very much more clean cut.  Entire cost centers ( teams from a geographic location ) were eliminated, no prejudice.  But what’s weird is that other cost centers have open positions, and instead of automatic transfers, it becomes an open interview process.  But then again, big business has procedures to follow.

This situation is easy to analyze, the market didn’t perform as expected, less revenue, cut your expenses.  Did the cutbacks seriously harm the companies future, no.  Will this affect the long term, probably not.  They faced a situation, and acted upon it.

 

Following these two examples, you need to question, what are the plans to get back on track.  The second layoff example I mentioned was a temporary downsizing based on lower than expected company performance, so their plan, is probably to be more lean, and to re-grow as the markets pick up.  The first example, you need to question the plans they have to get back on track, finding new clients, offering new solutions, or is this just trying to stave off closing the company as long as possible, or keep it afloat long enough that someone will buy them out?

stay tuned for part 2: the execution, and 3