Planning is everything.
No matter how urgent it might be for you to reduce expenses – you have to plan for as much of the process as you can. There are too many variables that can really get you caught up, and they can also be expensive – which really defeats the purpose.
Now, I’m not going to try to do a full retrospective on what seems to be happening at Twitter. And I willingly admit that I don’t have any type of insider information -so I can only go on what I have read – which certainly may not be the whole story. But, based on news reports – I think we can all learn a good deal from the layoffs and fallout that has come with them.
So, with all those disclaimers – let’s get to the lessons.
First up – know the pitfalls. How many people do you need to lay off, how will you select who should be on the list, how will you communicate with them. How might their role being empty, impact the company. Who needs to know ahead of time to help with the planning. Are there legal things you need to address.
You really need to pull together a cabinet of advisors to help you develop solutions for all the pieces you’ll face. Your HR team, the legal team, the accounting folks, senior managers, and if needed the PR people. Why so many groups. Well because your senior managers can help you develop the list and determine how those missing pieces will impact your success going forward.
Are you getting rid of most of the engineers? Well then, who will address application issues or upgrades. Are you planning on severely reducing the people who manage your internal technology? Then who is going to execute on getting all those former employees off your systems and shutting off their access. Your senior management team can help develop back up plans for keeping the business running while the team is being reduced.
“..if you want the company to move forward, as smoothly as possible, you have to get this process right. You have to get input from the talented specialists around you. And you have to take their advice to heart.“
The accounting team can give you ongoing visibility into the numbers. Will this layoff plan sufficiently reduce expenses to fix us? Will that layoff scenario produce the kind of savings we really need. What happens if we cut back on the layoff list – how does that impact our financial runway?
The legal team (and actually the HR team as well) can point out the legal pitfalls that might pop up. Will you trigger the WARN act. And if so, what can you do about it.
There is actually more than 1 WARN Act. There is the Federal WARN Act – and it applies to businesses with 100 or more employees, and is laying off 50 or more people at a single site. And, that’s just a very general overview, there are other eligibility criteria – but for the sake of argument, let’s go with this. Well, that business has to give workers at minimum of 60 calendar days notice period – or pay an equal amount to everyone.
And I mentioned there is more than one WARN Act. Well, the states got in on it too – so there are a number of states that have their own WARN Act requirements. They’re called mini WARN acts and each one has it’s own thresholds, so just because you don’t’ qualify under the Federal WARN doesn’t mean you’re free and clear.
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If you decide to give some sort of severance, you’ll need severance agreements (which again, will come from your legal team), but you’ll also need to know what can make those agreement invalid – and make sure you steer clear of those issues. For instance, if the person is over 40, you have to content with the Older Workers Benefit Protection Act or OWBPA. That means you have to give them data on the ages of people who are going, and people who are staying. And your agreement has to provide for a review period, and a revocation period, among other things. So again, it’s critically important to have solid legal advice.
Then we move on to the HR team. Most likely they will be the people with the fully rounded view of the process. They’ll know what you’re trying to accomplish, they’ll know who’s on the list and what function the provide for the company. They’ll know the employment law requirements. And frankly, they’ll most likely be the people to execute on all of the paperwork, coordinate the discussions, cancel benefits, arrange for COBRA, answer employee questions. They’ll be very busy.
And an interesting side note – I, as well as most HR professionals I know, have personally been in the position of managing through a layoff, and at the end of the whole process, having to manage laying off myself. What can I say, it comes with the HR territory.
And then there’s the story for public consumption. If you’re very small, you may not have to contend with news reports – but make no mistake about it, word will get out, and it will impact your brand.
And if you’re larger than very small, then you’ll probably have to craft some sort of public statement strategy, and contend with the press. That’s why having a professional PR team on your team is so important.
Listen, I get it – you need to stop the financial bleeding. But if you want the company to move forward, as smoothly as possible, you have to get this process right. You have to get input from the talented specialists around you. And you have to take their advice to heart.
And after all – as a leader, you know it’s not just about today. It’s about the future, and successfully achieving the vision. And to do that – you need to live to fight another day. While leaving as little carnage behind as possible.