Ask HN: I'm going to have to lay people off, and want your advice

https://news.ycombinator.com/item?id=9876009

by sadthrowaway • 11 years ago

141 140 11 years ago

news.ycombinator.com

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.)

steven2012• 11 years ago

I've been through the dotcom bust, where my company went through 6 layoffs in a single year. We went from 1400 to about 600. I survived them, but it was a terrible experience, and after a while, people stopped working and just gossiped about the next layoff.

First 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.

ScotW• 11 years ago

Great advice. I'm not sure I could add anything more except maybe that the people you are laying off are going to take this personally. If the layoffs were not due to them, assure them that is was not about their individual performance. Also, if its possible, be willing to be a recommendation for them. That will confirm for them that it was not necessarily them and it will assure future employers that you didn't use PE just as a way to let go underperforming staff

danielodio• 11 years ago

Sorry to hear it -- I'm sure it's eating away at you. I'm a founder who's had to do it too, in the past. It never gets easier; you just get better at it.

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.

jjwiseman2• 11 years ago

Try not to make people sign anything the same day you lay them off, and definitely don't put a check in front of them like you're trying to entice them.

davidm888• 11 years ago

There are a number of comments saying things like, "get them to accept the check on the spot," "entice them to sign the severance agreement quickly," "make sure they sign it fast before they change their minds and get a lawyer," etc. This is bad advice.

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.

scintill762• 11 years ago

I wouldn't ... lock their accounts unless you think that they are going to cause problems.

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.

PhrosTT• 11 years ago

I think he/she just means a surprise account lock followed by the you're fired meeting. [ala finance industry]

You would obviously close off all credentials once they're out the door.

dpark• 11 years ago

I'm pretty sure he wasn't saying to leave them unlocked indefinitely. Some companies lock accounts as soon as they lay people off (or even before), because they're paranoid that someone will grab trade secrets or sabotage something. Treating people this was is really insulting. It's generally reasonable to let people retain access for a short period of time (i.e. the rest of the day) so they can do things like send goodbye emails to the team, grab the e-tickets (or whatever) that they had sent to their work address instead of their personal address. No one should expect their accounts to remain unlocked for long, but long enough to close out any open threads and say goodbye is just being respectful.

monksy7• 11 years ago

I would say that in this case... the personal stuff should have stayed off of the work email.

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.

monksy7• 11 years ago

Also, if you have a non-compete on the employment agreement. Do the right thing and nullify that agreement. If they go to your competitor, you have no one to blame but yourself. A non-compete does nothing from sharing secrets. Confidentiality agreement prevents that. (That is advice from a lawyer)

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.

balls1876• 11 years ago

Also, if you have a non-compete on the employment agreement. Do the right thing and nullify that agreement.

They OP may not have the ability to nullify employment agreements. They may have the ability to not enforce them post layoff.

justonepost• 11 years ago

That's a good one! However, I'd like to say if there is a very good severance paid (golden parachute) than a non compete is OK in my eyes. If you can't afford a great severance, than by all means, make life as easy as possible for your employees and remove anything that can block them getting rehired. These are real things you can do instead of just saying "oh sorry, I'm laying you off, I feel so bad, yada yada yada"..

ansible• 11 years ago

I'd be surprised if a non-compete was enforceable in a layoff situation. It is another thing if they quit on their own, or maybe if they were fired for cause.

jsprogrammer2• 11 years ago

Non-competes are generally null and void as soon as they go into the contract and could even imperil the entire document.

sandGorgon• 11 years ago

what kind of explanation do you give for the layoffs ? how would you make the top performers stay back - do you talk about how the ones that were let go were dragging down the company ? or do you talk about revenue targets not met, etc

zak_mc_kracken3• 11 years ago

Your advice is very humane and sensitive but it's definitely siding with the employees and not the employer. If you're an executive at that company in charge of doing the lay off, this is terrible advice.

Not trying to be heartless here, just trying to point out that there are two sides to all stories, including tragic ones.

pbreit• 11 years ago

If you're going to call the advice terrible, you should provide some rationale.

davemel375• 11 years ago

Never tell the employees how YOU feel. No one cares.

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.

ectoplasm3• 11 years ago

I think it's okay to express gratitude. And other feelings, maybe. It just depends on how it's said, and whether you're self-centered about it or empathetic. It's like breaking up with someone. If an employee says that they enjoyed working with you and they're going to miss you, it's totally appropriate to respond in kind. Just don't whinge and draw all the attention to yourself.

jpwgarrison• 11 years ago

This is good advice and continues to apply to the meeting/discussion with those NOT getting laid off. There is simply no way for you to pass on how bad you feel and have it come off well. I recall vividly a VP going on and on about how hard the day had been for him, and just thinking, man, keep digging yourself in deeper... it hurt to watch and I never regained respect.

Bahamut• 11 years ago

In addition, don't complain about anything either. I once got laid off (without the manager being direct), and the manager complained about his email going to blow up as a result of a touchy situation. Once I figured out what happened, I lost a massive amount of respect - anyone who is going to complain about something small when letting someone go does not deserve to be a manager. Such a drastic lack of empathy or awareness of the situation shows a profound lack of leadership skills from the selfishness.

balls1876• 11 years ago

Personally I wouldn't escort them out or lock their accounts unless you think that they are going to cause problems.

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.

caseysoftware• 11 years ago

I have been on the "survived" side of layoffs a number of times and on the other side once. I agree with almost everything here except the "not lock them out of accounts" part.

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.

bopf• 11 years ago

I had to do this many times and the advice from steven2012 is gold. Do it personally, do it with dignity. It is important for those who stay as most likely you will be laying off some of their friends. Do everything you can to allow those who need to go to save their face.

sskates• 11 years ago

I've found what Ben Horowitz has written about management to be incredibly helpful. I am lucky to never have had to lay people off, however, if I did, I'd go to this first: http://www.bhorowitz.com/the_right_way_to_lay_people_off

wtvanhest• 11 years ago

I have luckily never had to do this or never been had to be laid off, but when I read his book, this appeared to be the most reasonable way to do it.

JacobAldridge• 11 years ago

I've had to let people go directly, and helped others through this process. It sucks, and it's an immensely valuable lesson as an entrepreneur - when you've done this once, you will work harder to prevent it ever happening again, while at the same time being prepared to do it faster in situations where that is warranted.

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.

gesman• 11 years ago

Kudos to you for asking this question.

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.

kls• 11 years ago

Don't do it on a Friday, mid week is best. Friday is the worst, that being said get it over ASAP and give them as much warning as possible to give them time to land on their feet. I agree with Steven cut more than you have to, a second round of layoffs means you loose everybody you would want to keep. I have never seen a company survive if it has went to that well twice.

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.

artmageddon3• 11 years ago

Don't do it on a Friday, mid week is best. Friday is the worst

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...

frenchie14• 11 years ago

That has nothing to do with Friday vs. Monday though. A major deadline can be set any day of the week and management has to be cognizant of that in deciding when to lay off. It's likely that in your case they were, but not in the way we'd hope.

jjwiseman2• 11 years ago

If you're doing layoffs, the company fucked up and the pessimist was right while the optimist was wrong!

hueving• 11 years ago

It doesn't matter. You can't have a pessimist in bad times.

zak_mc_kracken3• 11 years ago

Friday is the worst

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".

blazespin• 11 years ago

Severance severance severance. Everything else is just words. If you can't afford it, than give everyone vesting / option rights for ten years.

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.

BinaryIdiot• 11 years ago

Short but good advice. The last set of layoffs I went through at a big company was just everyone being really worried until they gave a somewhat fair severance. That calmed the mood significantly. Fortunately I missed the layoff cuts but myself and my co-workers were on edge until they announced the severance.

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.

idunno246• 11 years ago

> give everyone vesting / option rights for ten years.

This has some consequences, as after 90 days they lose ISO status and they'd lose all the tax benefits.

antjanus• 11 years ago

My first week at a new job, half the company got let go. And a few months later, it got slashed even further. I don't have the specific numbers but at the end of the year, we went from over 200 to about 80ish. (I hope I got the numbers right)

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).

jryanwilliams• 11 years ago

^I agree with the note above. Very easy to loose faith in a company who didn't cut deep enough. I survived a layoff round only to be furloughed for the week after Christmas a few months later. Had lots of time during a cold winter to think about how I should have quit months ago.

geuis• 11 years ago

Be honest with the employees. Don't just spring it on everyone. Don't do it on Monday when people are expecting to come in fresh and start their week. It's ok to let people know changes are coming, even if you can't tell them the details right away.

physcab• 11 years ago

I was laid off once, and although it was a horrible experience, I do not think I would feel as bad if it happened again. The reason is that the first time you get laid off, you think to yourself you are absolutely fucked and there is no way out of the tunnel, especially with bills looming. But in hindsight, it was never as bad as it seemed. I was able to hook up with a recruiter and I was back in another job within 20-30 days. So here I am telling you I survived and everything turned out ok!

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.

IndianAstronaut2• 11 years ago

The only way to deal with a layoff is to be fully prepared. Keep an active resume, have huge savings, be debt free, and have good contacts.

mindvirus• 11 years ago

One thing that I would add as a worker is to be cognizant of people on work visas. In America, H1Bs have very oppressive terms for being out of work, in that one is technically immediately out of status if laid off. This means that they would have to quickly find a new job willing to transfer their visa (within a couple of weeks) or take their family and leave the country. I don't know what your options are to help lessen the blow here (is it possible to keep someone on payroll for a couple months in lieu of severance?), but keep it in mind.

x0x02• 11 years ago

I'm not sure of the legalities but I worked for a place that kept a laid off h1b employee on in a no-show position for 8 weeks to give him time to transition.

fenomas• 11 years ago

This is how it worked both times I was laid off from a large silicon valley company.

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).

gnoway2• 11 years ago

I've personally been instructed to fire two people who reported to me, who had been coworkers before organizational changes and who were both nominally friends. There is no easy way to do it even if it's justified. The worst part is honestly what happens after - the person may have a hard time finding another job, and even if the separation is justified it's still kind of 'on you' for letting them go; a lot of people would assert that it's on you anyway for not making them better.

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.

monksy7• 11 years ago

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.

This and a few other things really makes one not want to work for a startup again.

gnoway2• 11 years ago

I was trying to highlight the separation experience with that startup, not startups in general. That startup was all wrong: wrong idea, wrong funding, wrong people in the wrong positions, etc. It was doomed from the start, but it still didn't have to end (for me/us) the way it did.

artmageddon3• 11 years ago

I just went through a layoff, but was thankfully hired at another place within a few weeks, and I consider myself very fortunate, given that I was having performance issues. For me, here's what helped me get through it:

-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.

mark-r3• 11 years ago

In the U.S. I believe the law requires them to give you 12 months of continued health insurance (see https://en.wikipedia.org/wiki/Consolidated_Omnibus_Budget_Re...). But any subsidies you enjoyed while employed are done, you must pay the entire premium yourself and that can be expensive.

artmageddon3• 11 years ago

Right, I could have stayed on it if I wished, but only one month was covered by them, and it really helped.

jen729w• 11 years ago

Just be honest. Don't try and hide stuff, or sugar-coat things: tell people how it is, why it is, and even if it's horrible initially I believe they'll thank you for it in the long run.

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.

ghughes• 11 years ago

What did your accountant do?

MalcolmDiggs2• 11 years ago

As a founder who has laid people off in the past, I think the kindest thing you can do (for everyone involved) is give them as much notice as you possibly can. No matter what pay-rate the employees are at, assume they're living paycheck to paycheck, and that a sudden loss of their income will be much worse than a loss 2-3 months from now.

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.

cookiecaper2• 11 years ago

And by "notice", I'm sure you mean "severance". Do not, I repeat, do NOT give employees advance notice of the termination. Convert any would-be notice period into severance and sever ASAP.

MalcolmDiggs2• 11 years ago

I think it's a bit case specific. Ideally, yes I agree with you. But assuming you're on a shoestring budget and these employees (through their work) are generating a portion of the revenue that you'd need to keep paying them at all, then I'm not sure severing ASAP is feasible. But hopefully it is.

bjourne• 11 years ago

But when paired with the other advice given out in this thread "layoff your biggest underperformers first", why would you be a reference to them? Other employers would call you and you would lie and say that they were awesome when you really thought that they sucked?

cperciva2• 11 years ago

Layoffs are the easiest time to give an employee a reference: "We really wanted to hold on to Bjorn, but we hit a hard patch and had to lay people off. We'd hire him back in a heartbeat if we had more money."

rbobby• 11 years ago

It's a layoff... not even close to a firing for cause.

vonmoltke• 11 years ago

Just because the laid-off employees were your lowest performers does not mean they suck. No matter how good a group of people is, someone has to be at the bottom.

cookiecaper2• 11 years ago

I've been on both ends, being fired/laid off and doing the firing/laying.

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.

evanwolf• 11 years ago

Within the HR profession, there's a discipline about performing layoffs that minimize litigation risk, unemployment insurance costs, reputation risk, etc. Firms like Lee Hecht Harrison walk employers through a complete menu of services that prep the layoff meeting, instructions for HR, IT, and security, and services for your layed-off people that get them into job search quickly. LHH claims, for example, that their service "gets employees back to work 50% faster". You'll trade off the benefits of a graceful exit vs. the cash you need to keep.

- http://www.lhh.com/career-transition/career-transition.aspx - http://www.risesmart.com/outplacement

SeoxyS• 11 years ago

Related question: Are there any well-known & admirable companies that have gone through layoffs early in their lives?

sbisker• 11 years ago

I suspect the list is pretty long. But off the top of my head, Pandora had a pretty brutal layoff in the very beginning, to the tune of (from what I understand) basically asking their most dedicated employees to work for free. Somehow they pulled themselves out of that one, but, it wasn't pretty.

vskarine• 11 years ago

What if you tap into your connections and try to find them a job? Think of it as if the other company acquihires part of your company. Chances are you are probably firing teams and there are many reasons why any company would love to get working teams as a package. In this situation everyone wins. Of course it is harder to pull off than it sounds.

CCs2• 11 years ago

Here is more information than you would expect :)

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...

thaumasiotes• 11 years ago

Are you saying "the only legal method of choosing who to lay off is a meticulously documented firing lottery", or "do it by performance, but don't admit it"?

CCs2• 11 years ago

I'm saying that there are many options with non-obvious consequences, so don't try to wing it. Any mistake will cost you orders of magnitude more than a professional advice.

danieltillett2• 11 years ago

Cut more than you have to so you only have to do it once. Don't worry if you cut more than you could have if things pick up, it is critical that it is one and done.

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".

jmadsen• 11 years ago

If you are the CEO/near the top, don't make the foolish mistake of telling people "but now we're all set & we won't need to do this again"

You just might, and you'll lose all credibility with your employees.

danieltillett2• 11 years ago

This is true in that you should never promise anything you can't deliver.

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.

kethinov3• 11 years ago

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?

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.

lsc3• 11 years ago

So, I've got comments from both ends, but I think your advice is super interesting, especially from the employer-side of things.

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.

kethinov3• 11 years ago

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?

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.

mark-r3• 11 years ago

Any lawyer is going to tell you to keep your mouth shut in this situation. Anything you say at this point may be held against you later. Sucks, but true.

declan• 11 years ago

I've worked at companies during layoffs, and have been a manager at these companies as well (though fortunately never had to lay someone off personally). My advice:

- 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.

davemel375• 11 years ago

- 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.

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.

balls1876• 11 years ago

If you really care about making it easier for the person being fired, this is a MUST.

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.

cm2012• 11 years ago

That is an amazing revenge story.

tripzilch2• 11 years ago

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.

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?)

throwaway781110• 11 years ago

Here's how not to do it...

Experience 1:

- Start deactivating their accounts a week before giving the news.

- Give 3 days severance pay and act like it's not just them not wanting to figure out how to cut 3 days out of a paycheck.

- Have the manager escort the employee to HR without a word, and then leave and let HR deal with the hard part.

Experience 2:

- Tell the employee over email while they're on vacation, and then never bother to have any follow-up in any form.

CookieCutter2• 11 years ago

I've laid off several people several times.

To me it was much harder than firing people - hard by itself - because mass layed off people ask "why me" where I had no good answer.

Keep handkerchiefs around.

davidglauber• 11 years ago

First of all, get an upvote for taking the effort to try and make it better for those whom you lay off.

I've never been laid off from a real job, just from a temp one where the owner was a jerk. Few things I can think of: 1) Try, with you best efforts, to help the folks you lay off to get other jobs. Recommend & refer them to those you see relevant. Make sure they get advice from their direct boss about what the should/better/could do next, and try to get your company waling their hand thro.

2) Clarify the situation quickly. People hate to get these news but rumors running around are much worse.

3) Some managers afraid try to detach their compassion to cut this awful mission fast. This is not the time to pull the authoritative boss too much. You're already sending them, try to show warmth.

4) Keep in touch with the best employees you have to let go. Try to hire some of the in the future if you can. If will be a great closure.

5) Can you send them away with something? A course to develop their skills towards the next job? a gift? few meetings with career coach for each laid off employee? (you can but that at bulk)

Best of luck!

endymi0n• 11 years ago

If you're the CEO, show presence. Our former CEO went home on the afternoon and let middle management do the talking. Don't be that guy. People will be angry at you and it will feel shitty. Do it anyway and absorb the blame. It's only one day.

Either be visibly available or take part in the layoffs.

In the layoffa, be fair, transparent and clear - but follow the protocol. Don't beat around the bush, your (and your managers') first sentence should be "We're very sorry, but we will let you go." Instilling hope or doubt where there is none is unfair, don't do it by accident.

Reiterated because it's so important: nobody cares about your feelings that day. You can't make it better. Don't make it worse and be a real grown-up.

rebootthesystem• 11 years ago

Be kind, just, considerate, etc. Many have covered these ideas, no need for me to repeat them.

What I will say is, you should consult with an attorney. It is all well and fine to go through life assuming that all people are good, honorable, ethical and even altruistic. Yet, it is even better to believe those things while taking steps towards protecting yourself and your company should you come across someone who deviates from such notions.

Why do I say this? Because I've been burned on more than one occasion by people who see a layoff as an opportunity to enrich themselves. If you don't know how to manage a layoff it is very likely that you will do and say things that will expose you and your company to liability. This is the part that sucks. You have to lawyer-up in order not to create a problem for yourself or your business. There are Federal and State laws you have to be aware of.

Spend a few hundred dollars to sit down with an attorney well versed in matters surrounding labor law and have him/her advise you on how to conduct the layoffs.

balls1876• 11 years ago

I've had to let people go, and have been a survivor through multiple rounds of layoffs, if you are VC Backed, first check if it's possible to land the better performers at another company that backed by the same investors.

The first start up I worked at, had a pretty tough rounds of layoffs. One of the engineers found a home at a startup that was backed by the same VC. Eventually as the first startup went under, he laid the ground work for some of us to transition over to his dev team.

joshu• 11 years ago

I remember the time that Yahoo announced layoffs in time for earnings, but the specific people to be laid off we're not find out for six more weeks. This was not very good for morale.

bitJericho• 11 years ago

There's nothing worse than getting cut loose on a friday evening on a payday. Can't do anything about your circumstances for 2 days such talking to unemployment, talking to other employers, etc. Let that last paycheck roll in a week or two later, it will ease their mind even though in reality it would make no difference.

andersthue• 11 years ago

The best hand on experience I have ever read about firing people due to lack of funding is Steli Efti from Close.io in this blog post : http://blog.close.io/i-fired-half-my-team

I have fired people recently and wished I had read that blog post first!

chrisbennet2• 11 years ago

The last time I was laid off, I had 2 months notice. I still drop by every once in a while to have lunch. I feel lucky I got to work with those guys.

reilly3000• 11 years ago

I had to lay off a bunch of people. Same day: good. Taking it very personally as a failure: very bad. Companies over-hire, funding fails to come through, key clients leave. If you were good to them when they worked for you, you did your best. Now your company needs your best, most focused self. I instead wallowed for 6 months and the company has lost a bit of its stride. Don't do that.

keithpeter• 11 years ago

What percentage (roughly) of employees does this affect? A 10% reduction is different to a 50% reduction.

Is the need for lay-off simply related to revenue or are you eliminating a whole category of work (e.g. outsourcing)?

Being told that 'we just don't do that work any more' is perhaps less disruptive to other parts of the organisation.

A cut for revenue reasons will obviously raise issues about the competence of management and so your high-fliers will be arranging to leave.

utuxia• 11 years ago

I went through mass layoffs during the dotcom bust. Most people were expecting it...that made it easier. I was still a little shocked but when you're ushered into a room with 74 other people and they start handing out packets...you're pretty sure what is about to happen.

We all went out for beers afterwards and discussed it.

I suggest you get the CEO to mention there will likely be cutbacks, that way its not out of left field.

Otherwise, just be honest. Bring them all into a room, be short and don't beat around the bush. The last thing people want is a bunch of bullshit. Watch "Up In The Air" -- its pretty sad how this effects people.

Give them the rest of the day to collect their things....a few days to clean up their laptops before turning them in.

What size company is this?

legopelle• 11 years ago

The best thing you could do is letting them know in advance.

Let them know at least a month in advance, leaving them much needed time to adapt to their new financial situation.

EliRivers• 11 years ago

You're going to want to keep your best employees. They're going to be thinking about leaving.

By virtue of being the best, these are the employees who would most easily be able to find work elsewhere, and they're the smartest employees who will not just shrug and carry on as before when they see their fellows being made redundant around them. They will think about what it means for the company (and thus their future). They will see what's happened and think about moving on. Maybe not right away, but they'll be thinking about it, and your best employees are (by definition) the ones who other companies most want.

You asked us to note where we speak from personal experience. I've seen it happen, and I've done it myself. I watched a round of redundancies come through, and I was told not to worry; I was essential and a good employee. I found another job with a company that was doing better. The company I left found that the people it most wanted to keep drifted away over the following year.

You need a plan to keep these employees.

Also, check the local laws for laying people off for whatever reason you're doing it. You'd hate to have someone come back with a legal claim in a year. I've seen that happen too.

EnderMB• 11 years ago

I've been made redundant once before, but luckily landed on my feet right away as my contract (and the companies clients) were taken over by another company.

The best advice I can give as someone on the other side is to:

1. Do it quickly. Tell them right away that they have been made redundant, and that it is non-negotiable. Let them know that it is not of any fault of their own, and that they will be allowed to interview whenever they please. Being made redundant sucks, not just because you're out of a job, but because you often feel that if you were better at your job the company wouldn't have had to make cutbacks.

2. If you make someone redundant during work hours, make sure they leave the office at the end of the day. I've worked in companies where employees were made redundant at around 2-3pm and then asked to return to their desk to carry on work. This was a huge problem for everyone in the office, as that person was still working to a deadline, and was asked by the manager to (paraphrasing) "stop moping, and get on with your work".

3. If you know anyone looking to hire in roles you are making redundant, let that person know that you know someone who would be great at the role, and let that person know that you'll write them a glowing recommendation.

HenryTheHorse• 11 years ago

Did this only once to a dozen people and it was BRUTAL - both for them and for me. So let's not pretend it is simple or painless. Here's what worked for me:

* Put paperwork in place - termination, contracts, final settlement, dues etc etc - get those facts together in writing.

* Have a schedule for each affected employee's "exit" interview. No "send so-and-so in". That can be very stressful for the employee. Instead, set up a calendar invite and talk.

* If any employees are remote, have a video-conference so they can SEE your face.

* Go through the process as quickly as possible - ideally, all announcements within the same day.

* Have a "script" for the interview. This should include the announcement, the reason and the next steps (HR, benefits, payroll, equipment). Don't be needlessly cryptic/dishonest about the reasons behind the firings. Layoffs occur for ONE reason only: finance. So tell your employees the basic facts, but you are not obligated to share ALL the gory details. Simply saying "Our financials are the reason why we are doing this and I am sorry this will impact you and many others" is good enough.

* Be patient during the interviews. Don't rush it. Every laid-off employee thinks this has to do with them personally, when it's not. So take your time to explain, sympathize, offer help and guidance.

* Don't forget to reach out to the non-affected employees after the process. They too are running scared and deserve compassion.

I also personally reached out to all affected employees a few weeks after the layoffs to see how they were doing. Nearly ALL of them had jobs, which was awesome. This may or may not work in every scenario, so YMMV.

chmaynard• 11 years ago

Off topic, but the term "layoff" seems like a euphemism for "fired". I always thought that a true layoff meant the employer intended to re-hire the workers after the company's financial position improved. I wonder if labor law makes this distinction?

abraham_s• 11 years ago

Talking from the perspective of someone on H1-B. Please keep any employee on H1-B on your payroll, in lieu of a severance pay. This will help them to minimize the issues that crop up with the immigration when you are out of a job for a extended period.

mathattack• 11 years ago

I've been on both sides of this within the past year. (Have been let go, and had to let go 40% of a company) Ben Horowitz writes about this, and it's required reading. [0]

Some thoughts:

1 - When you have the announcement, be clear about the reasons for it. ("The market moved", "We didn't hit our revenue plan." or "Mgmt f*cked up.")

2 - Highlight the severity of the situation. ("If we don't do this, we have 3 months of runway left, which isn't enough time. If we do this, we have 9 months to get our act in gear.")

3 - Given the constraints of #2, be as generous as possible with severance.

4 - Never ever badmouth anyone who was let go as a result of this.

5 - Be a proactive reference for those let go. Don't just wait for calls - make placement calls for your people.

(Note - 3 through 5 is in part to be humane to those leaving, and in part to rally those left behind.)

6 - If at all possible, only cut once. Cut deeper if you need to just to avoid doing it twice.

7 - Be firm in the meetings. "This isn't about performance, it's about saving the company." It's not a negotiation. Have at least 1 witness in the meeting, ideally an HR person.

Note - all of these things still won't make it any better, just less worse. It's a tough thing to cut off your foot to save your leg. That's what you're doing.

[0] http://www.bhorowitz.com/the_right_way_to_lay_people_off

MichaelCrawford• 11 years ago

Give them this link: http://www.warplife.com/jobs/computer/

email me at mdcrawford@gmail.com and I will post what listings I already have for your area, and will find some more. (Presently I have the Portland Oregon area, Seattle and six or eight others actually posted but I have at least a few listings each for hundreds of cities in dozens of countries.)

Ask your local government's employment office for help with outplacement.

Say nice things in their linkedin profiles.

Give them all hardcopy letters if recommendation.

ddp• 11 years ago

Just do it in person. I've seen co-workers laid off via email, SMS, and voicemail, and that all sucks much worse than in person. If you absolutely must, a live phone call is acceptable, but only when there are serious impediments to meeting in person. My favorite story is of a person who was dispatched to a remote facility to lay off a group and on his way there, was himself laid off in a voicemail. Don't be that company.

DrScump• 11 years ago

this relevant item was posted today: https://42floors.com/blog/startups/after-the-layoffs

6d0debc0712• 11 years ago

There are, at least in my area, charities that do excellent employment support. (Might want to consult with HR to see what your liabilities are in that direction in your area.) Whenever I've fired people or had to let them go, I've made sure those charities are aware of the situation and available to work with. That way it's a bit less, "Good luck and goodbye!"

Also letters of recommendation and keeping them on as employed with zero hour contracts for a month or so so that their CV has current work history on it while they're looking.

Ask HN: I'm going to have to lay people off, and want your advice

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