The Right Way to Lay People Off

The Right Way to Lay People Off

Layoffs are one of hardest things a CEO must do, and they represent a failure of the company to meet its plan. While the act itself is painful, the process by which it's handled is critical. A well-executed layoff can preserve the trust of the remaining team; a poorly executed one will destroy the company culture.

The message is not for the people who are leaving; the message is for the people who are staying. They will judge the company and its leadership by how their departing colleagues are treated.

A 6-Step Framework for Layoffs:

  1. Get Your Head Right:

    • As the leader, you will feel like a failure. Acknowledge this, but do not let it consume you. Your job is to focus on the future and lead the remaining team forward.

  2. Don't Delay:

    • Once the decision is made, execute it as quickly as possible.
    • Delaying allows rumors to spread, creating a toxic environment of fear and uncertainty. This forces managers to lie or look incompetent, breaking trust across the organization.

  3. Be Clear About the "Why":

    • Do not spin the layoff as "cleaning up performance issues." This is dishonest.
    • The clear message must be: The company failed to meet its goals. You are laying off good people because of a company failure, not an individual one. Admitting this failure is the first step to rebuilding trust.

  4. Train Your Managers:

    • This is the most important step. Do not send managers into these conversations unprepared.
    • The Golden Rule: Managers must lay off their own people. They cannot delegate this to HR. It is a matter of respect and courage.
    • Train them to be clear, concise, and prepared with all the details about severance and benefits. The decision is not a negotiation.

  5. Address the Entire Company:

    • Before the individual conversations happen, the CEO must address the entire company.
    • Deliver the overall message, explain the business context, and take responsibility for the failure. This provides "air cover" for the managers and shows the team you are leading from the front.

  6. Be Visible and Present:

    • After the announcement, your instinct will be to hide. Do the opposite.
    • Walk the floor. Talk to people. Be available. Help people carry boxes to their cars. Your team needs to see that you care. Your visibility demonstrates respect for both those leaving and those staying.

Tags: #leadership #management #layoffs #communication #culture #trust #hard-things #HR