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Fast Talk

June 18, 2008

Q: Is there a good way for companies to lay off employees? | posted by Fast Company staff

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June 18, 2008 at 10:25am by Megan DaGata

The best way to lay off employees is to not do it, but that is not going to happen. So, what is the next step? Before a company lays anyone off, they should take a realistic assessment of who is doing the majority of the work and how well they are doing it. You can't automatically assume that the best employee for the job is the one who has been there the longest. You can't automatically assume that the person who has been there the least amount of time hasn't learned the tools to be better then their superiors. What they need to do is determine their fiscal goals and then determine how to best maintain a solid workforce while keeping customers, clients, and fellow employees happy. If it is determined that there needs to be mass firings then bring them into an office and tell them face to face, the emails and things that have been in the media are not right. They are cowardly. When you are going to fire someone you bring them in and sit them down and get through the details.

June 18, 2008 at 10:28am by Rachel King

There's never an easy way to do this. The best suggestion I could offer is to give as much advance notice as possible to employees to start looking for work elsewhere, so they're not left stranded.

June 18, 2008 at 10:52am by Rip Empson

Yes. I would suggest offering a pint of Ben & Jerry's. Or a gigantic severance package, or two months of pay while they look for a new job...these would work well, I think.

June 18, 2008 at 11:19am by Saabira Chaudhuri

Your job is a massive part of your identity; when you take that away from someone you're essentially bruising a really core part of them. There's never a good way to lay someone off but there are better ways. Be upfront and fair – give them a reason, give them a good severance package, give them time to say goodbye and to acclimate to the idea. If you have security concerns fine – handle sensitive information carefully but don't boot someone out the same day unless there's a really good reason. Let them leave with dignity.

June 18, 2008 at 11:24am by Kelly Livesay

Well, define "good way". I think you can lay off employees with dignity in three ways:

1. Be upfront and honest about the reasons for layoffs-FULL disclosure (i.e. if it was bad business decisions, then say so)

2. Be sure executive level staff took cuts in bonuses/perks and/or salary before layoffs were considered

3. Make great attempts at offering new positions within the company to downsized staff OR help them (really) find work outside the company

June 18, 2008 at 12:09pm by Tyler Adams

Completely agree with Kelly and Saabira. Sometimes layoffs are necessary and/or unavoidable. The best thing a company can do is make the transition as smooth as possible (i.e. severance packages, help finding another job, etc.)

June 18, 2008 at 12:49pm by Gene Lu

this is very similar to the ad approach done by pandora.com. In my opinion, pandora does a much better job since they still give their content a bit more, if not the same priority as the ad. Also, the ads are usually designed into the site, which makes it a bit more digestible.

June 18, 2008 at 1:02pm by Gene Lu

"We find it's always better to fire people on a Friday. Studies have statistically shown that there's less chance of an incident if you do it at the end of the week." - Bob Slydell (Officespace)

June 18, 2008 at 3:18pm by Nathan Minetti

Eventhough noone ever wants to be laid off I think one way to help employees that are being laid off besides the obvious of better severance packages is to give them some notice. When an employee leaves the company they try to give 2 weeks notice as a courtesy so the company can begin to fill their position. Why can employers not give that same courtesy? I was laid off from a company and they gave me 10 minutes to clean out my desk. With some more time I could have lined up another job or at least not feel embarrased when I had to walk out with the contents of my desk in hand so everyone could see that I was being let go.

Give employees the courtesy of knowing that they are being laid off so it does not hit them by surprise and does not leave them enough time to clean out their desk and say farewll to their coworkers.

June 18, 2008 at 3:46pm by Laura Palotie

This might be veering slightly off topic, but I was recently interviewing the editor-in chief of a Finnish newspaper, and during our conversation asked her if the recent decline in print news was resulting in similar newsroom cuts there as in the U.S. It wasn't until I asked my question that I realized it not to be applicable: To get fired in Finland, an employee has to reeeallly screw up. So no, no newsroom cuts.

Made me a little homesick...I have to say.

June 18, 2008 at 3:46pm by Salem Honey

This is such a fine line between notifying the employee's early (which, legally you may be required to do so) while retaining them as long as possible, and keeping up productivity.

I don't believe their is a "good" way, except massive severance / compensation packages.

June 18, 2008 at 4:01pm by Mark Goulston

Don't belabor the bad news with too much of a preface. Say it upfront, and then have someone meet with those people to discuss their career objectives, how to leverage their skills (especially what they have already done that has made a positive measurable difference at your company and elsewhere) and provide possible introductions to people/companies that especially need those "ready-to-use" skills.

June 18, 2008 at 4:21pm by Carel Two-Eagle

I don't believe there is. As a result, my approach has been: get volunteers; next are difficult people and goof-offs. After that, it's a matter of duplication of jobs, productivity and quality of whoever is left, and last hired, probably first laid off.

June 18, 2008 at 8:13pm by Daryl Hunter

Decisively and fair.

June 18, 2008 at 8:19pm by One Ton of Feathers

Hit them when they least expect it. Do not allow anyone to return to their deak or work area. If possible, lay the person or persons off out in the parking lot. No severance pay. No thank yous. No smiles or kind words...just drop the hammer and walk away, with Security around you, of course.

June 18, 2008 at 8:22pm by One Ton of Feathers

Actually, the kindest thing one can do is call the affected person or persons at home and tell them not to bother coming in. That way you, as a caring Manager, will not have to see the agony on their faces. Why ruin your nice day simply because some unnecessary employees are getting whacked?

June 18, 2008 at 9:49pm by One Ton of Feathers

The best thing to do is never hire them in the first place. Simply drive the staff you already have harder and harder. They are all just fear-filled minions anyway and they respond well to fear. A lot of overtime is good for their bottom line and yours.

June 18, 2008 at 11:43pm by Stewart Shriver

Is there a good way to lay off employees?

Well, laying off employees is usually a result of a business problem: slow sales, economic downturn, political or other factors that are unfavorable to the business. In their book Krotz, Pierce & Ryan (2005). Microsoft Small Business Kit. Washington: Microsoft Press. “If the company must cut staff, you ought to have prepared employees.” You may also want to consult with an employment lawyer before doing any lay offs, it’s usually less expensive to seek advice before the fact, than after the fact.

So sometimes you may have to lay off persons to prevent the entire ship from sinking – so to say. It will not be a pleasant experience for either side: employer or employee. Now you may be thinking who will I lay off? This is where you will have to do some critical thinking and analysis.

Review or make your business strategy now, perform your SWOT analysis, remain flexible and changeable with your business and maybe you won’t ever have to worry about the question: “Is there a good way to lay off employees?”.

Wishing everyone much success,

Stewart Shriver

June 28, 2008 at 6:38pm by Randy Gonzales

Compassion and understanding is key in this process. I've worked for a large corporation who just had the worst layoff process. But it varied between departments because it was the managers and VP's who would handle how this should be executed. There were cases when people were let go on the spot and had minutes to pack and leave, some were sent notices on while on vacation, and some of the lucky ones had a week to find a new position. A great of amount of higher ups need to learn management and people skills and unfortunately many lack these very important skills. I think a company should do as much as possible to make the experience less stressful by doing the following; offer a severance package, job coaching, job searching assistance, and advance notice.

July 1, 2008 at 12:04pm by Nadine Petrarca

Let them ease out of the job with dignity Write a letter of reccomendation for the employee to submit with their resume.This is an important gesture in helping the employee to not feel abandon by the company they've given so much to and it may aslo help in recovering any lost self esteem. Of course it will be a help in the job search as well. Ample notice will give employees time to update their resume and begin their job search(better to do when you have a job then when your unemployed)and hopefully keep unemployment down.

July 4, 2008 at 4:21am by Krishnaprasad Bannanje

Probably introduce a scheme for part time working/employment policy with pro-rated compensation so that employees dont feel that their life is in stake right away. However, as an employer can not afford to go for this flexibility if the option is really hurting his bottom line.

Lay-off is becoming common across in the recent days. I think everyone should become more smarter and innovative by started thinking " Love your job and not your employer" :)

July 15, 2008 at 6:16pm by Mark van Tatenhove

Having experienced downsizing because of the economic climate a number of times, I don't believe employers have got it right yet.

It would nice to be treated as a person, and feel like you have been valued as an employee. And rewarded for the time and energy you have put in. Many employers are focused on costs and job descriptions, making the position redundant more than thinking about what the person had to offer and how the skills can be applied to many positions.

It would be good to have career counselors within a company and someone that can offer independent advice (not what is in the best interest of the company)

October 20, 2008 at 9:32pm by Shoshana R. Petals

I got laid off this past Monday and was told I had 2 weeks. I worked for this company for 2 years as a Graphic Designer/Creative Coordinator. This company was small and I was basically the whole art department. I set the design standards for catalogs, packaging, website, etc. My company was bought out by a larger company 6 months ago. This company has a Creative Director and 2 graphic designers under her. They kept me around (I think) just long enough for their design team to get to speed on what to do. Once they shown that they could do what I do, I was given the boot. Really nice kick in the ass. I may have felt better if one of the designers on their side was also let go, at least make it even. Why did they ket me go when I put so much into this company and this art department will come and copy what I did?

The VP of the company who bought us came to my desk today and said, "I am sorry things did not work out and I hope that you find something new soon." I thought that was a really lame attempt at being nice. First, of all does this six-figure VP really have a clue of what I am going through? I will struggle to pay my bills and the economy sucks so there are so few jobs to apply for in my field.

My advice to any six-figure execs, don't partonize the poor person and say you are sorry that things did not work out while you know damn well that you will go home in your Lexus and drive to your mini-mansion. The only comforting thing is to show some EMPATHY. If this has happened to you, show your employee that you can relate to what they are feeling, and you would be willing to help them find work since they are a talented employee who would be an asset to another company. Since you know this is a serious blow to the employee, severance should not be a choice.

October 20, 2008 at 9:33pm by Shoshana R. Petals

I got laid off this past Monday and was told I had 2 weeks. I worked for this company for 2 years as a Graphic Designer/Creative Coordinator. This company was small and I was basically the whole art department. I set the design standards for catalogs, packaging, website, etc. My company was bought out by a larger company 6 months ago. This company has a Creative Director and 2 graphic designers under her. They kept me around (I think) just long enough for their design team to get to speed on what to do. Once they shown that they could do what I do, I was given the boot. Really nice kick in the ass. I may have felt better if one of the designers on their side was also let go, at least make it even. Why did they ket me go when I put so much into this company and this art department will come and copy what I did?

The VP of the company who bought us came to my desk today and said, "I am sorry things did not work out and I hope that you find something new soon." I thought that was a really lame attempt at being nice. First, of all does this six-figure VP really have a clue of what I am going through? I will struggle to pay my bills and the economy sucks so there are so few jobs to apply for in my field.

My advice to any six-figure execs, don't partonize the poor person and say you are sorry that things did not work out while you know damn well that you will go home in your Lexus and drive to your mini-mansion. The only comforting thing is to show some EMPATHY. If this has happened to you, show your employee that you can relate to what they are feeling, and you would be willing to help them find work since they are a talented employee who would be an asset to another company. Since you know this is a serious blow to the employee, severance should not be a choice.