Jessica Kriegel, Chief Scientist of Workplace Culture, Culture Partners.
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We’re back in a boom and bust cycle of layoffs, especially within tech. The good news is that the job market isn’t completely dead. We’ve seen decent GDP growth in the last six months, and any scan of LinkedIn or Indeed will show you companies are hiring. Good. But people are also getting axed. Bad.
Beyond the macro hot takes (“Are tech salaries too inflated?” “Did tech over-hire during the pandemic?”), I'm more interested in the people and culture side. I’ve been laid off and I’ve had to lay off people. Most mid-career professionals have likely experienced both. It’s awful, especially in an inflationary period. When you lead and instigate a layoff, you know the anxiety and tension you cause within a family. It’s not a good feeling. At all.
As I've stated before, a layoff is "...the end of a work relationship. When relationships end, you end a claim to active empathy with the other person. Leaders who claim empathy with those they are laying off are not being honest with themselves about their role." (I like this take, by Ted Bauer: When you lay off, don’t be an ass.)
Here are ways leaders can own their role in layoffs—and begin to rebuild psychological safety with those who remain.
Transparency: The Virtue
We talk a lot about transparency in work contexts, but we don’t often walk the walk. Executives get scared about whether being an open culture means you’re a “soft” culture, and middle managers fear that “transparency” means proprietary information will get leaked. Neither is true. Transparency creates trust and psychological safety with your team. What butchers work relationships is getting blindsided by big news; managers don’t want to be caught unaware by their teams on big projects, and employees despise companies that lay them off with no forewarning.
Step one: If you’re a leader, the literal second you know layoffs are coming, tell your team. I’ve said this on media hits and at conferences, and some people recoil from it: “But then I’ll lose my top people.” Okay, so what? People leave jobs. Let them leave on their terms, not yours. If you treat others with respect and foster a culture of autonomy and accountability, you can boomerang back with them down the road at another job, or even the same organization. If you don’t own your role in the relationship with transparency, they are probably gone as a professional connection forever.
Be honest about what’s happening and recognize that you hold the power, here—you are instigating a “transparent separation.” Proceed with clarity.
Don’t Be A Jerk
I’ve seen stories of “firing via email” and “firing via group video call” lately. These actions feel like the other end of the break-up spectrum: totally ghosting your people and disrespecting the professional relationship you have supported. Never do these things. They read as actions about scale (handling multiple layoffs at once), but the potential PR blowback is huge.
Here’s the golden rule: “Would I want to be laid off in this way?” If you cannot answer “yes” 100%, then don’t do it. The best scenario is usually a 1-on-1 with a direct report.
The Hard Truths
Business can be brutal. Capitalism can be a boar. Things can be very hard as you move through the middle part of your life and career. These are, unfortunately, realities. Remember: If you remove the weights from a gym, it’s not a gym anymore. It’s just a place with mats and mirrors. You need the weights to do the growth work. That’s also life.
When you lay someone off, explain the bigger picture (not the minute detail) of the company’s finances, quarters, cash on hand, etc. Explain that this had to happen for the greater good of the company. Offer to be a resource for searches and connections. But don’t overcompensate with empathy. You are not in their shoes. Proceed, instead, with transparency and compassion.
'People Who Kick A** Are Always Welcome Here.'
I’ve said this in layoffs. I have had it said to me. It feels hollow in the moment, because, well, you’re getting laid off.
There’s a bigger message of, “This sucks, but as things evolve and come around, you made an impact here.” It’s interesting to see some companies that have a huge percentage of “boomerang” employees. Typically, that means the company either went through some rounds of layoffs and brought the best people back, or those people left for supposedly greener pastures and realized Company A had the greenest pastures of all. Heavy “boomerang” companies usually are pretty functional, because the people inside have realized, “Hey, this a good place to be. I’m comfortable here.”
Aim to be a boomerang company.
Put your money where your mouth is—if a few quarters go really well, reach out to some who were laid off and say, “Want to come back? I think we can make this work.” This sends a message that you value talent, you care about and remember your people and the case may have been that you had to make a hard decision purely due to bottom-line pressure.
The Public Q&A Model
We had a client do this recently. Before the individual layoffs happen (in 1-to-1 managerial meetings), hold a big all-hands meeting and be transparent about:
• Industry climate
• Financials
• Cash on hand
• Run rate
• Percentage spent on payroll
Let the executives lead that. Then, put them on the hot seat. They need to take questions from anyone—in the room, on video, on the phone, up at the International Space Station. If someone has a question about layoffs and processes and decisions, leadership needs to answer all of those within 60 to 90 minutes. This will, at the very least, showcase a culture of honesty, openness and people not hiding behind greed or wanting more for themselves. This is how you build psychological safety for the long term.
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