Unfortunately, I've been through a lot of layoffs since 2001 including 4 consecutive rounds over 4 quarters that ended up laying off 85% of our engineering team. I definitely echo the "cut once, cut deep, cut decisively" advice. Not only is it incredibly disruptive to have a layoff every quarter, it also ties up senior leadership in deciding what to cut and what to keep. Finally, if you move people from project to project, you incur a learning period every time.
The other advice I would give which I don't think was mentioned is to have a contingency communication plan in case word leaks out early in the process. I was not part of nor affected by a layoff in 2020 that leaked early due to people's system access being cut off prior to them being notified. Managers (like myself) were asking for guidance/information, but that was not part of the schedule so we weren't informed until several hours after the news got out.
Thank you for writing this. "If doing layoffs, aim to have a plan and implement it as humanely as possible." I feel like this line really summarizes the entire essence of this post. Appreciate your thoughtful and well-written content as always!
The quote from the Harvard Business Review article "Layoffs that don’t break your company" seems misleading (on the part of the authors). The imply that layoffs may cause the company's stock price and profitability to decline, when obviously it's extremely likely that companies who foresee declining profits are more likely to do layoffs. Similarly, investors are likely to see layoffs as an indication that the company is forecasting declining profits, hence the reduced stock price following a round of layoffs. Same goes for the other comment about companies who do layoffs being twice as likely to go bankrupt.
I mentioned it inside the latest Scoop #12 where I went through a bankruptcy, reorganization, or/and layoffs.
What most companies don't know is that banks have rating scores for all clients. Some of them are centralized based on the 5AMLD(5th Anti-Money Laundering Directive) where you can ask the certified body what's going on inside from a financial perspective. Financial institutions have the broadest knowledge about you due to KYC(Know Your Customer) responsibilities.
Each crucial decision results in that scoring going up or down. Harmful/detrimental decisions can result in situations in which all allowed bodies can mark your decision as detrimental and you can end up in a situation where you will be cut off from the money (bank accounts, investments, etc.). It's a very slow process so you can encounter it after some time if your chain of decisions will be detrimental all over.
Example of this situation you can see against Russia and companies that are sanctioned or cut off from money and SWIFT. When such a process will start you cannot stop it because it's like a train, hard to stop. You need to have 100% sure that what you do is the right thing that why you can't speed up the process.
Some bodies can mark you as a threat(as a company). Company and management board can have a lot of problems including sanctions, also personal.
Unfortunately, I've been through a lot of layoffs since 2001 including 4 consecutive rounds over 4 quarters that ended up laying off 85% of our engineering team. I definitely echo the "cut once, cut deep, cut decisively" advice. Not only is it incredibly disruptive to have a layoff every quarter, it also ties up senior leadership in deciding what to cut and what to keep. Finally, if you move people from project to project, you incur a learning period every time.
The other advice I would give which I don't think was mentioned is to have a contingency communication plan in case word leaks out early in the process. I was not part of nor affected by a layoff in 2020 that leaked early due to people's system access being cut off prior to them being notified. Managers (like myself) were asking for guidance/information, but that was not part of the schedule so we weren't informed until several hours after the news got out.
I thought you are going to use Better layoff as example.
Thank you for writing this. "If doing layoffs, aim to have a plan and implement it as humanely as possible." I feel like this line really summarizes the entire essence of this post. Appreciate your thoughtful and well-written content as always!
- Jeraldine from Singapore
The quote from the Harvard Business Review article "Layoffs that don’t break your company" seems misleading (on the part of the authors). The imply that layoffs may cause the company's stock price and profitability to decline, when obviously it's extremely likely that companies who foresee declining profits are more likely to do layoffs. Similarly, investors are likely to see layoffs as an indication that the company is forecasting declining profits, hence the reduced stock price following a round of layoffs. Same goes for the other comment about companies who do layoffs being twice as likely to go bankrupt.
I mentioned it inside the latest Scoop #12 where I went through a bankruptcy, reorganization, or/and layoffs.
What most companies don't know is that banks have rating scores for all clients. Some of them are centralized based on the 5AMLD(5th Anti-Money Laundering Directive) where you can ask the certified body what's going on inside from a financial perspective. Financial institutions have the broadest knowledge about you due to KYC(Know Your Customer) responsibilities.
Each crucial decision results in that scoring going up or down. Harmful/detrimental decisions can result in situations in which all allowed bodies can mark your decision as detrimental and you can end up in a situation where you will be cut off from the money (bank accounts, investments, etc.). It's a very slow process so you can encounter it after some time if your chain of decisions will be detrimental all over.
Example of this situation you can see against Russia and companies that are sanctioned or cut off from money and SWIFT. When such a process will start you cannot stop it because it's like a train, hard to stop. You need to have 100% sure that what you do is the right thing that why you can't speed up the process.
Some bodies can mark you as a threat(as a company). Company and management board can have a lot of problems including sanctions, also personal.