If you have to let people go in a layoff

Layoffs are still happening. In some cases, cash strapped companies are letting their second or third wave of employees go to conserve cash for operations. Because the recessions come to different industries and sectors at different times, some managers are grappling with their first ever “Reduction In Force.”  

Over the last decade, I’ve studied layoffs from several vantage points: Are they justified, except in survive/go-bankrupt situations? How are people chosen for the layoff? What can you do to avoid being on the list, etc.?  The most important area to study, though, is “How do you do a lay off?”. 

In other words, when the day comes for you to let ten/twenty or fifty percent of your people go, what do you do?  Most companies have set legal strategies, mostly involving having a witness or HR person present as well as usher-out-the-door security provisions.  What most companies do NOT have, are tips for managers to minimize the emotional and social costs of a layoff to everyone involved, including the surviving employees. 

I’ve been a manager during three layoffs in my careers, and each one was gut wrenching.  Do them wrong and you have ex-employees that hate you and the company.  The other pitfall is that the remaining employees are so distraught with survivor’s guilt, office morale and productivity plummet. 

If you are a manager or supervisor, getting ready to layoff some of your people, here are five tips to take to heart:

1. On Layoff Day, meet with all of your direct reports (both the leaving and the staying) in alphabetical order.  You do not want to only meet with those you are letting go.  Just imagine: You walk over to someone’s cubicle and ask, “can I see you for a minute.”  She gets up slowly, sighing, and every other cubicle dweller around watches in horror as the two of you walk into a conference room and close the door.  Minutes later, the ex-employee is packing her desk and sobbing.  From now on, every time you ask any of your people, “can I see you for a minute?”, they’ll get a knot in their stomachs.  

If you meet with everyone from A-Z, on the other hand, you avoid this stigma.  You also help reduce any survivor’s guilt that will likely be generated in your best people.  For those that are staying, explain why they were picked to go forward and what you need from them in the short and long term.  That meeting starts out with, “you are staying with us” — no need to create any drama by beating around the bush.  Which leads me to…

2. Be very direct. If you are letting someone go, say it within the first ten seconds of the closed door meeting.  The longer you take, the worse it is.  Thank him or her for their contribution and give a specific (hopefully personal) example of something you’ve noticed and appreciated.  If it is a large layoff, you’ll need to do prep work and clear everything with your HR manager.  Also, speaking of being direct, never make a supervisor lay someone off if it wasn’t his decision.  If it was yours, then you do it.  Otherwise, your supervisor will be able to throw his hands up and say, “if it was up to me…”, which will give false hope or breed incredible resentment. 

3. Don’t make promises.  The layoff meeting is quite final, it is not a starting point to string things out. In many cases, the employee will argue with the decision and beg for you to help him stay. If the decision is final, hold firm, and don’t make idle promises like “I’ll call the VP, again, and see what I can do.” It is also not a good time to promise that you’ll actively help him find a new job, either.  If and when you fail to follow up on any promises you make during that meeting, you create even more bitterness and legal liability.

4. Visualize the following: In ten years, a few of the laid off employees will come up to you at a conference and thank you for terminating them in 2009.  They’ll explain that they weren’t happy or effective at that job, and by losing it, it was a wake up call that led them to their breakthrough career.  Why visualize it?  It will happen.  In every case, I’ve had this experience.  However, doing a layoff is painful, especially for the firing managers, and it can bring you so down you hate yourself, your job and your career.  By having a positive visualization, you remove yourself from the moment and think long term.  (There’s no use wearing yourself out, unless you are a foolhardy owner that over hired and failed to create prudent cash reserves for bad times.  In that case, you should feel horrible.)

5.  Have a meeting at the end of the day with the survivors.  Let them voice concerns.  Don’t promise that “this is all of the layoffs” and never insinuate that people might be brought back when times get better.  Explain the economics of the layoff, using upper management whenever possible.  Stress that each remaining person is vital to the team and will be tested in the short term with bigger workloads. Thank them all in advance for their calmness.  Offer to meet, again, with anyone that has any questions.  

I hope you never go through this experience, I plan to NEVER do it again in my life.  But if you do, you need to understand that how you do it has huge impact, especially in this social-media world where upset ex-employees can Twitter/YouTube and blog about you and your company.  

Check out my first book, Love Is The Killer App, for more ideas on the importance of compassion in business life.

Other useful resources to read: