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The Silent Man
5 of 5 stars
Another great John Wells book. I previously compared Alex Berenson and his hero, John Wells, with Vince Flynn and his troubled CIA agent/assassin, Mitch Rapp. Towards the end of Flynn's short life and in his final Rapp books, Flynn got a...
tagged: fiction and troubled-assassin
Getting Started with Hobby Quadcopters and Drones
2 of 5 stars
When I was looking up reviews of drones on the web, I found several mentions of this "book" (a pamphlet,really). It's OK,but all the information can be easily found elsewhere online. The repeated warning about crashing your drone and sta...
tagged: non-fiction
The Martian
5 of 5 stars
Wow. Just . . . wow. This was one of the most entertaining books I have read in a long time. The story is fabulous and the execution wonderful. Basically a diary of an astronaut left behind in an escape from a failed Mars mission (though...
tagged: fiction
The Target
2 of 5 stars
I can't even begin to imagine why this book has gotten good reviews. I have read and enjoyed Baldacci's books before, but this is the first book in the Will Robie series that I've read. Probably the last as well. It's the third one of t...
tagged: fiction and troubled-assassin
David and Goliath: Underdogs, Misfits, and the Art of Battling Giants
3 of 5 stars
I didn't love this book. While I generally like Gladwell's style and analysis, he seems to be running out of interesting observations or topics to cover. There are a few good tidbits and the book is short. If you love Gladwell, it's wor...
tagged: non-fiction
Anthem
4 of 5 stars
I love Ayn Rand's thought-provoking books and stories. I'm fundamentally aligned with her libertarian way of thinking so, for the most part, her stories are just one's that drive home a point that I already agree with or, at least, under...
tagged: fiction
Thinking, Fast and Slow
5 of 5 stars
This is simply a fabulous book about how the mind works and how our behavior is driven by our levels of thought. It's not a terribly difficult book to get through, although it does require a lot of System 2 thinking - Kahneman's term for...
tagged: non-fiction
Killing Jesus: A History
4 of 5 stars
As with the other "killing" books by Bill O'Reilly and Martin Dugard, I really don't like the positioning that the book is based entirely on fact - insinuating the other crappy books I've read are made up. In the documenting of Jesus' li...
tagged: non-fiction
Wooden: A Coach's Life
4 of 5 stars
How can one not like a book about John Wooden? The man is a sports icon. Most of all, of course, he's a teacher, which is exactly what he wanted to be and prided himself on. He based his entire life on teaching basketball fundamentals an...
tagged: non-fiction and sports
Dead Eye
5 of 5 stars
Wow. Just. Wow. This is a great book. In the ex-CIA-troubled-assassin genre, this may be my favorite book ever. Greaney does a fabulous job of balancing action with storyline. Never gets boring, but the reader is overwhelmed by ridiculou...
tagged: fiction and troubled-assassin

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How to Manage a Layoff

All companies, yup that includes the successful ones, eventually have some form of layoff.  Before you go ballistic on me, let’s first define a layoff.  According to Wikipedia, a layoff is:

the termination of employment of an employee or (more commonly) a group of employees for business reasons, such as the decision that certain positions are no longer necessary. Originally the term “layoff” referred specifically to a temporary interruption in work, as when factory work cyclically falls off. However, the term has long been applied also to the permanent elimination of positions as a cost-cutting measure (or for other reasons).”

So, a number of employees (one or more) that are terminated for larger business decisions as opposed to for poor individual performance is a layoff.  Even successful companies at times make decisions to get out of a business or change a focus that results in the laying off of some employees.  Similarly, an acquisition of another company with some degree of overlap of people can necessitate a layoff of redundant people after the merger.

More likely, of course, are layoffs that are the result of a downturn in business.  Here again, terminations are not related to individual performance (other than, perhaps, the decision to lay off one person instead of another), but are a result of a business restructuring required to help the company deal with its financial difficulties or other current crappy situation.

A layoff has nothing to do with firing employees, though.  I frequently talk to CEOs or other high-level managers who say that they are laying off people when they are really firing them.  In my opinion, these people are less confused about the terms than they are in hiding behind the softer term, layoff.  They think it sounds better to the people being fired as well as those who remain.  When somebody isn’t cutting it and you’ve done your best to make it work, you’re firing them.  Period.  Call it what it is.  Everyone is happier with clean, honest straightforward messages in the end.  ’nuff said.

If layoffs are inevitable, then it’s critical that strong leaders and managers know how to do them.  As with firings, in the broad business scope, it’s critical that you optimize the management of any layoff so that your business or organization is set up to be successful moving forward.  That means thinking about the people and the organizational situation left after the layoff as much as, if not more, than the people being laid off.

With that in mind, here are my 9 guidelines on how to manage a layoff, in no particular order:

  • Do it quickly – nothing will drain the life out of an organization faster than mass fear of job loss.  Rumors are uncontrollable and people pick up on small signals incredibly well.  While it’s very important to make sure you spend the time to get a good action plan in place, don’t let the time between a decision to do a layoff and the execution of it extend longer than it absolutely has to.  As a corollary to this one, avoid sending up red flags before you’re ready.  The rumor mill is powerful, there’s no need to help it along.
  • Do it once – this is a mistake I see made all the time.  A layoff is done in stages because management: is afraid that they’re cutting too deep; know they’ll need some folks to complete their current tasks before they’re laid off; miscalculate the savings they’ll get from the layoff; or, is just wimpy.  Not completing a layoff in one pass will kill the productivity of those who remain.  They’ll wonder if they’ll be in some subsequent round, even if none is planned.  They won’t believe it’s really over until loads of time has passed without incident or they’ve left the company.
  • Cut deep – you may think that you’re a spreadsheet wizard who can run detailed sensitivity analyses indicating the precise range of the financial impact of your layoff.  Trust me, you can’t.  People who you thought would stay will quit; you’ll have legal fees that you didn’t expect; there will be a severance issue that you didn’t even consider; or, one of 10,000 other unpredictable things will happen.  Leave yourself some room, cut more people than you think you need to.  You’ll be happy that you did when it’s all said and done.
  • Plan ahead – Decide how you’re going to handle the termination details – have any severance, benefits, insurance, outplacement service offerings or reference policy well documented ahead of time (can you afford any of these?).  Plan for and know exactly how long each employee should stay around before they are laid off (generally speaking, people should be walked out the door the day the layoff is announced).  Have the complete package (written) ready to hand to the employee when they are told they are being laid off.  Have a script ready if more than one manager is laying people off.  Consistency is important.
  • Cover your ass legally – while tight cash may be the issue that led to your layoff, getting some legal advice if the layoff is in any way extensive might be a good idea.  As you likely already know, there are no bounds to the legal problems that employee matters can bring about.  Run your plans by your lawyer at least for a sanity check.  It’s money well spent.
  • Do it in person – as absurd as this sounds, you’d be surprised at how often people are laid off by email or on the phone.  The manager of each person being laid off should take the employee aside, explain what is happening and what benefits are part of the layoff.  If a manager is laying off multiple employees, they need to balance the need to spend time with each one, with the fact that everyone else in the group is waiting to see if they’re next.  So, be kind, but be clear and to the point.  Don’t beat around the bush.  You don’t have time.
  • Communicate – Make it clear to everyone (those being laid off and those remaining) why it happened and what has been done or is being done to make sure it doesn’t happen again.  Emphasize that the layoff as just witnessed is OVER and that no one else will be laid off because of the current situation (new situations may, of course, come up).  Stand up and take responsibility if poor decision-making or a specific strategic choice led to the current situation.  Be clear – nothing complex.  Explain why those being laid off were selected for the layoff instead of those remaining.  Be respectful of those departing and thank them for their efforts, they are not being laid off as a result of anything they did, after all.  Be ready to meet with each person you manage one-on-one in order to allay any fears or address any concerns.
  • Learn from it – it’s unlikely that you planned for the situation to come about.   Was it a business issue you should have predicted?  A change in the marketplace that you should have flagged?  Had you grown too fat?  Costs gone out of control?  Change in strategy or focus?  Whatever.  Understand it now so that you can avoid the situation in the future.
  • Keep communicating – don’t stop communicating with employees left after the layoff just because the layoff is over.  They need to know why they won’t be subject to similar mistakes or problems in the future.  Everyone wants to work for a winner.  You need to tell them why they are going to be successful right where they are.  Don’t give false reassurances, though, tell it like it is.  This doesn’t mean you shouldn’t sell the positive future prospects for the company.  Just don’t candy-coat the current situation.

I wish I could say that I never had any substantial layoffs in companies that I’ve run, but truth be told, I’ve had to do it more than once.  I’ve also made most of the mistakes above.  It’s certainly not easy and there are almost an infinite number of ways that the situation can get out of hand quickly.  If you use the guidelines above, though, you have a better shot of avoiding the case where the situation gets totally beyond control.

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  • fewquid

    That’s a great list. I’ve been with two companies that took the “death by 1000 cuts” approach to layoffs and it’s deadly. Chopping off an arm or a leg is no fun, but it sure beats waking up each morning to find that some random appendage has been nibbled off in the night… Morale gets crushed and you are far more likely to lose the good folks that you need in order to survive as a company.

    When I had to do a significant layoff (9 out of a team of 25), I got everyone being laid off in a room and told them simultaneously, giving all of them the chance afterwards to sit down one-on-one with me after the meeting. I then met with the rest of the team and explained what was going on.

    Of the 9, only 3 were suprised and only 1 was angry. I was able to negotiate generous severance packages for everyone _because_ we had made the cut before the situation was desparate.

    It wasn’t fun, but it was the right thing to do and the business was able to get back on track.

  • fewquid

    That’s a great list. I’ve been with two companies that took the “death by 1000 cuts” approach to layoffs and it’s deadly. Chopping off an arm or a leg is no fun, but it sure beats waking up each morning to find that some random appendage has been nibbled off in the night… Morale gets crushed and you are far more likely to lose the good folks that you need in order to survive as a company.

    When I had to do a significant layoff (9 out of a team of 25), I got everyone being laid off in a room and told them simultaneously, giving all of them the chance afterwards to sit down one-on-one with me after the meeting. I then met with the rest of the team and explained what was going on.

    Of the 9, only 3 were suprised and only 1 was angry. I was able to negotiate generous severance packages for everyone _because_ we had made the cut before the situation was desparate.

    It wasn’t fun, but it was the right thing to do and the business was able to get back on track.

  • http://www.2-speed.com/ Will

    Nick,

    Your point about being able to offer severance packages because you did the layoffs before it was an emergency says it all. If you’re close enough to your business and what’s going on you can do that kinda of stuff. Response is almost always better than reaction. The better you are at managing your overall business, whether things are going well or not, the better you can deal with situations like this.

  • http://www.2-speed.com Will

    Nick,

    Your point about being able to offer severance packages because you did the layoffs before it was an emergency says it all. If you’re close enough to your business and what’s going on you can do that kinda of stuff. Response is almost always better than reaction. The better you are at managing your overall business, whether things are going well or not, the better you can deal with situations like this.

  • Stephen Coutts

    In addition to the excellent points that you have made above, I would add the following:

    - if the company is headed toward bankruptcy, make the decision and the layoffs before entering the zone of insolvency, while one still has the cash to create a safety net for the employees (COBRA, severance, outplacement); this will allow one to secure releases from those outplaced, an important feature for retaining title to any IP assets that remain in the company.
    - coordinate with IT to freeze computer systems on the day that the layoff is announced to prevent malicious file destruction or theft of company information by those layed off.
    - Arrange for an outplacement service to wait in the wings to talk to the employees once the CEO or HR has told them what is happening and why; have outplacement packages ready so that the employees can see a path toward getting their next job.

    These points are off the top of my head as I read your article and recally the full shut down that I had to supervise at my last (biotech) company.

  • Stephen Coutts

    In addition to the excellent points that you have made above, I would add the following:

    - if the company is headed toward bankruptcy, make the decision and the layoffs before entering the zone of insolvency, while one still has the cash to create a safety net for the employees (COBRA, severance, outplacement); this will allow one to secure releases from those outplaced, an important feature for retaining title to any IP assets that remain in the company.
    - coordinate with IT to freeze computer systems on the day that the layoff is announced to prevent malicious file destruction or theft of company information by those layed off.
    - Arrange for an outplacement service to wait in the wings to talk to the employees once the CEO or HR has told them what is happening and why; have outplacement packages ready so that the employees can see a path toward getting their next job.

    These points are off the top of my head as I read your article and recally the full shut down that I had to supervise at my last (biotech) company.

  • http://www.2-speed.com/ Will

    Stephen,

    Your point about doing the layoffs prior before becoming insolvent(or even just having minimal cash) is really what it’s all about. If you know enough about your business to see it coming, you’re 7/10ths of the way there. Most people are blind-sided and do the layoffs as a knee-jerk reaction. Knowing ahead gives you loads more flexibility.

    On outplacement. Some might dismiss this as something only “big” companies do, but as you suggest, outplacement can take various forms, including just a promise of writing recommendations for the employees’ next job.

  • http://www.2-speed.com Will

    Stephen,

    Your point about doing the layoffs prior before becoming insolvent(or even just having minimal cash) is really what it’s all about. If you know enough about your business to see it coming, you’re 7/10ths of the way there. Most people are blind-sided and do the layoffs as a knee-jerk reaction. Knowing ahead gives you loads more flexibility.

    On outplacement. Some might dismiss this as something only “big” companies do, but as you suggest, outplacement can take various forms, including just a promise of writing recommendations for the employees’ next job.

  • Margaret Martin

    I truly feel like I was a target. I had great reviews with all my past managers I was a great employee and very loyal. I worked 28 and half years for this company. My goal was to retire with
    this company but it was not their goal. I blame my
    self for trusting them for all of twenty eight. The only way I seem to cop with what they call a workforce restructior a new legal name is to keep writing to people and never let them forget what they have done to my life.

  • Margaret Martin

    I truly feel like I was a target. I had great reviews with all my past managers I was a great employee and very loyal. I worked 28 and half years for this company. My goal was to retire with
    this company but it was not their goal. I blame my
    self for trusting them for all of twenty eight. The only way I seem to cop with what they call a workforce restructior a new legal name is to keep writing to people and never let them forget what they have done to my life.

  • http://www.2-speed.com/ Will

    Margaret,

    That really sucks. I’m very sorry to hear about what happened to you. 28 years is a long time and shows a lot of dedication to your job and employer. I certainly don’t know what your situation is, nor the company’s, but it sounds like you see the situation as being very unfair to you. I’m afraid that that is not all that unusual – most company’s screw up the process. That is, the process of retaining AND letting people go.

    Good luck with things moving forward. I hope you find a way to deal with what is obviously a very painful situation.

  • http://www.2-speed.com Will

    Margaret,

    That really sucks. I’m very sorry to hear about what happened to you. 28 years is a long time and shows a lot of dedication to your job and employer. I certainly don’t know what your situation is, nor the company’s, but it sounds like you see the situation as being very unfair to you. I’m afraid that that is not all that unusual – most company’s screw up the process. That is, the process of retaining AND letting people go.

    Good luck with things moving forward. I hope you find a way to deal with what is obviously a very painful situation.

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