Leveraging Leadership

From Planning to Communication: A Leadership Deep Dive on Layoffs

• Emily Sander • Season 1 • Episode 210

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This episode talks about how leaders, especially a Chief of Staff, should handle layoffs with respect and care. Emily shares real-life examples of leadership teams deciding who gets cut, the importance of considering all other options first, and how to communicate tough financial realities to staff. He also discusses making fair decisions on who to inform, and gives practical advice on what to say in all-hands meetings when layoffs are on the table.


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Who Am I?

If we haven’t yet before - Hi👋 I’m Emily, Chief of Staff turned Executive Leadership Coach. After a thrilling ride up the corporate ladder, I’m focusing on what I love - working with people to realize their professional and personal goals. Through my videos here on this channel, books, podcast guest spots, and newsletter, I share new ideas and practical and tactical tools to help you be more productive and build the career and life you want. 

 

Time Stamps:

00:42 The Importance of Handling Layoffs Well
01:12 Personal Experience with Layoffs
01:54 Philosophy on Layoffs
02:58 Deciding on Layoffs
04:29 Planning and Coordination
10:56 Communicating Layoff Plans
15:40 Final Thoughts and Leadership Responsibility

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Let's be honest. No one wants to run a layoff round. No one wants to be on point for a riff, but if you're in the room where decisions are happening, especially as chief of staff, you might very well be in this position. How you handle that and how you step up into that will say a lot about your leadership and your leadership values and your leadership style and presence and all those things. It will say volumes to the rest of the company about your leadership team as a whole and what they're really about. So I wanted to do an episode, and this might turn into two'cause this is a large topic, uh, an episode or two here on layoffs. Not a fun subject, but an important one. If and when this does happen for you, you wanna be able to do it? Well, throughout my career I've been involved, unfortunately, in various companies, at various leadership roles in layoff rounds and reductions in force where, okay, we're doing some cuts, okay, this is affecting my team directly, or it's affecting another team right next to me, or I'm coordinating across multiple departments, this type of thing. And I've seen them be done well and I've seen them be done poorly. And I would much rather have these things be done well if they have to have. And so I'm trying to get any information from my experience that I have out to folks just in case they're in this position. So that's what this episode or two is, is gonna be about. Okay. To preface the conversation, what I would say is. There's two things that you can hold together as you approach this process, as you move through this process, as you reflect upon this process. you wanna do everything in your power to conduct a layoff round with as much dignity and respect for the individuals involved as possible. That's one thing. The other piece of it is layoff rounds and reduction in force, while not pleasant, while not a pleasant thing, they do happen in business. They are just part of the business world at a certain level. And that's just how it goes sometimes. And I know there's lots of different reactions to that and some listeners might be bristling at one or the other. And I think sometimes it's a lean, lean towards this side, and sometimes it's a lean towards that side. But I feel like it's always holding both together and I think you can do both together. So I just wanted to preface the conversation with that general philosophy, if you will. That's just my general philosophy and guideline going into these things. All right. Starting at the beginning is the decision of whether or not to do a layoff round at all. And this is an important decision, one of many critical decisions that A CEO, a chief of staff, a leadership team member will have. My general approach is to use layoff rounds as the last resort. You have many levers. You have numerous levers to pull and switches to switches to push and pull across the organization. And as a CEO, as a chief of staff, you need to be putting all of those on the table and at least considering and assessing a whole bunch. And I would say there's, you know, possibly dozens that you can pull before you go, okay, we're gonna have to tell people they don't have a job. I know that people have different opinions and different ways to go about that, and I've seen executives, which a, with a much more flippant attitude towards, we can just do a layoff round. Let's just cut those folks over there. Is that a thing that happens? Yes, absolutely. Again, my personal opinion, it should be the last resort. If not like we, we have to really think about this before we just kind of snap our fingers and, and make people go away. okay, so let's say for this example we're talking about here that layoffs are now becoming, mm, they're now becoming an option. We don't wanna do'em, but like now we're in a position, we're in a financial position where we might have to do that and everyone's kind of acknowledging and sensing, mm, this might be a thing we have to address and we have to attend to. all right, so who is involved in these discussions when we're saying, okay, we're discussing these things, it's on the table. Who, who's at the table? It depends, but certainly the CEO. And then it might be a smaller group on the leadership team. So it could be CEO, chief of Staff, C-E-O-C-O-O-C-E-O, chief of Staff, and COO, chief Financial Officer. So CFO could pop in here'cause if we're talking numbers and we're talking forecast and projections and contingency plans, you might need the CFO in those, in those tight conversations as well. Most of the time, the entire C-Suite team is involved at some level in these discussions. Let's say, all right, this is on the table. We've had the core group of leadership team talk about this and we want to have a plan in place if we need to go down this route. If we need to do a layoff, we wanna make sure we're doing it right. We wanna make sure it's thoughtful. We wanna get all our ducks in a row and just make sure we have this thing thought through. We're not shooting from the hip or panicking and saying, okay, like tomorrow guys, we're gonna do a layoff round. Let's just, let's, let's just do get this thing done. So it might be CFO. I need some contingency plans for if we have to cut deep, if we have to cut medium, if we think we can get by with a smaller layoff round. Here are some. Inputs from the market that we're seeing. Here's some inputs from the client churn. Here's some inputs from whatever is kind of causing the financial distress that has gotten you into this position to have to consider a layoff round. I mean, C Ffo should know about all these, but just kind of running through that together as a group. What are our inputs here? What are we seeing? How do we wanna craft and tee up our contingency plans? Okay, CFO Go come up with some plans. And then at the end of the day, this is where it kind of gets crass. Give us a number. And this number can come from the CEO based on a recommendation from the CFO. It can come from the board, it can come from just the CEO themselves, whatever it is. At some point it's a number. Okay? This can be anything. 5 million. Okay? this depends on your company, like 5 million from salary cap, it could be 300,000. It could be, you know, 150 million, whatever, like depending on your company size and depending on what that headcount looks like and all the rest, what's the number? Then it becomes a discussion, and this might be where you open it up to the larger C-suite team and say, Hey, we've done some, we've done some calculations, we've done some numbers. Here's the number. We have to hit the, one of the decisions to discuss. Is where does it make sense to make these cuts? If we're looking across the business, where does it just make sense as a business, as an overall business to make these cuts? Maybe it's from, clearly it's from one area of the business. Um, it's from engineering. Maybe, oh, we have an overstaffed sales force. Let's cut some sales folks. Maybe it's, Hey, we need to consolidate some of our customer service teams. Okay. This is where it gets interesting because a chief of staff can help facilitate and remind people that as a C-Suite team member, you are on two teams. You were on two teams, you are on your functional team, so operations, product compliance, marketing, sales, all those functional teams. You have that hat on and you are also part of the leadership team. You are a leadership team member who. Needs to advocate on behalf of what's best for the business overall, what is best for the teams overall. And that's a, that's can be a subtle distinction, but an important one, especially now. So we're not talking, you know, we're not talking. Be defensive, put your walls up, hoard your resources, defend your people. Go fight. It needs to be a conversation amongst the leadership team. And where I've seen top performing leadership teams thrive is where they go, okay, um, this is really tough, but it makes sense for folks, for my team to go.'cause we need folks over there on your team. And it also could be, all right, my team is not directly affected, but I see some pretty significant changes happening in these two other teams that are right next to me. And, okay, if, if we're gonna do that, if we're gonna cut deep on your team, you can like, let's share our, share some of my resources for the next six months. Hopefully we can bring folks back in six months, but like, you're gonna need some help. I can pull these five people from my team to help you. Just stand that thing up and hold, serve on your team for at least six months. if those types of discussions start happening, that's when you know you have a thriving leadership team. So where do these cuts. Need to happen from where does it make sense for the business overall? If you're in this position where you're even considering a layoff round, something's not going right, and so this might be an existential question. We're like, for the company to survive, what do we need to have happen here, guys? What do we need to have happen here as a team? Okay? Then it might be an exercise of, okay, now go put your functional leadership hat back on. And this is where it gets crass again. But we need a list. We need a list from every single person on the C-suite team of who would need to be cut. Who would be your recommendation to be the top 10 people, the top five people, the top 50 people, whatever it is for you. And the who does this might be informed by the previous discussion on where it makes sense. If everyone's just in agreement, Hey, it's engineering. I'm just using that as an example. It's engineering. So, you know, head of engineering, um, might be the CTO, might be head of product, whatever you call it. They're gonna have to go make their list. Many times it's, look, it doesn't matter where this comes from, we're all gonna have to get to the number. And so, to be fair, or just, you know, it makes sense for everyone to, cut some people it might be all right, everyone go think about it and come back with a list from your, from your department, from your respective departments, and then we'll come back and talk about it. sometimes those lists just go to hr, so it's a confidential thing. Sometimes it's a group discussion. It just depends on many, many factors about your team makeup and dynamic and what's happening there. Um. But that's where it is. You know, we're talking numbers on a spreadsheet, we're talking names on a list, and it's just, it's a tough conversation and not pleasant, but this is sometimes what needs to happen. So those discussions have happened, the list has been done. Okay. Now it gets to the point of do we tell people, Emily, do we tell the rest of the staff that this is gonna happen or this might happen? My general philosophy here for all announcements, not just around layoffs, but just in all for all announcements in general, is this information gonna be relevant and helpful to your audience? Is it gonna be relevant? Does it have to do with them, and is it going to help them? For this particular audience. That audience can be an audience of one. So one person, or it can be an all hands meeting or anything in between. But given who you're talking to, is this gonna be relevant and helpful? So I'm trying to, let me, I'm thinking, trying to explain relevant and helpful. If you're talking to Sam over here and Sam is in, I don't know, the sales operations team and you're having a one-on-one conversation with him and you start talking about Jenny over in accounting and how her benefit package has this, this and that, and Sam's looking at you going, uh, okay, that's not really relevant to me. I hope Jenny does well. I hope she has a good benefit package. But that's not super relevant information, that's not relevant, that doesn't have anything to do with Sam. Um, nor is it probably helpful. It might be helpful for like general context, but not really. You could have a situation where. Let's say over in sales operations, You've got Raul and Sam and they're team members and Raul's kind of, you know, go with the flow. More laid back, I'm doing my job, I'm doing a good job. You have some information, I'll take that in. Okay. It might happen, it might not. Gotta, gotta, good. Sam might freak out with every single data point he get. Oh, oh, oh, wait, wait, what's happening? Is that gonna happen tomorrow? Like, what am I doing with my, it might throw him to pieces. So what might, while something might be relevant to everyone on the sales operations team, it might be. Helpful to Raul, or maybe neutral, but it's not gonna be helpful to Sam'cause it's gonna freak Sam out. It's gonna unnecessarily cause him worry and anxiety. Okay, so the, I just, that's an example to kind of explain relevant and helpful. Now when you're making the decision of like, do we tell people, who are we talking about here? Who, whose people? This can be the next layer of leadership. So maybe SVPs or VPs, maybe mid-level managers. And then you have rank and file folks. Do we need to bring in the SVPs? Sometimes SVPs are brought in when you're making the list'cause they're closer to it. Uh, sometimes not. Do we wanna tell the larger organization that's a decision? Do you know if one team is affected? Are we gonna start to front run communications with that team only type of thing. So all of these discussions can be happening at this process and. There can come a juncture where there can come a scenario where, okay. We have individuals in this group, we wanna tell this particular group. And we've not got lots of individuals within that group. Some people it's gonna be helpful for, and some people it's not. What do we do? And that, that comes to, okay. Uh, what's the greater good here for the team as a whole, for this group as a whole? Is it relevant and helpful? Is it more, is it more helpful to tell them than not? Or, or not? Like, and that can be factors like where are we in the decision making process? Are we being very cautious, uh, cautious and saying, let's just get this plan in place. We're probably not gonna have to use it. This is just out of, an abundance of caution type of thing. Might not be worth getting people all riled up over, like, we've got a dozen other steps before we even bring that one to the forefront. We've got a dozen, dozen other options that I think are gonna go, are that I think are gonna get us back into a better financial position. Okay. It might be a decision, let's not tell folks.'cause we don't want to distract them and worry them for no reason. That does no good. That's not helpful. It might be. No, I mean, we've got some trust issues on this team for whatever reason in the past, uh, this layoff round is looking more and more likely by the day we need to start front running and communication, uh, and having communication with folks. Okay. That could be a decision. So lots of factors that go into that. That's just an example to, to kind of get you thinking about what I'm thinking about. Okay. Then let's say that, let's say in this example, you get to a point with your leadership team that, hey. This is becoming more likely. The numbers are not turning around. We're doing everything we can to try to turn this around and it's, and it's not happening. we are now talking about people's salaries. We're now looking at numbers on a spreadsheet. By the way, one thing before I go into communication here, by the way, one other lever you can pull if you get into the salary zone, where now we're talking about salaries. We've exhausted our list of 12 other things hasn't worked. We're talking about salaries. C-Suite team members tend to make the most money. They tend to have the biggest number on a spreadsheet in terms of salaries. One option is for them to take a pay cut so other people can keep their jobs. I've been in this position, and we've actually done this on leadership teams that I've been on. This can extend down to SVPs and VPs, et cetera, et cetera. Bonuses were the first thing that went for our group, so we just were like, no one on the leadership team was getting bonuses. And then certain folks, the highest paid folks on the leadership team took a salary cut for a temporary basis, and that was enough to get us to the number we needed. If it goes beyond that, and it's like, okay, we've done that, or for whatever reason, we've forgone, uh, forgone, we've forego, we forego that option and we go with another option. Now we have to talk about layoffs and people losing their jobs. Okay. Communication. All hands meeting. Let's say it's an all hands meeting. Holy cow. Alright. What I would suggest here is, first of all, don't jam yourself up into a timeline. I know sometimes you can't help it, but if you are like, look, we're in advance talking to contingency plans. We have time, we have time, but we still feel like it's gonna be the best thing to get this option out there and kind of start getting people's head around it and maybe socializing this is an option and talking about that. Then what I would say here is try to give people the overall picture and the context for why this might happen. And in this case, it's, it tends to be easy'cause there's a financial distress situation happening here. Revenue is not where we want it to be. Um, our profit margins took a hit from X, Y, or Z reasons, operational reasons, or whatever the industry happened. The, the competitor came, everyone knows that the competitor did this to us, da da da dah. Okay. Whatever it is. We're not hitting our numbers. We ha we're in a, we're in a. Financial position, we didn't expect to be in, and sometimes at all company meetings, you will have shared the finances with the entire team, not maybe the blow by blow, like row by row type of thing. You go over with your CFO or with the board. But most, a lot of companies will share some sort of financial status update at, at at least a high level. So hopefully people have kind of gotten the sense like, okay, maybe we're like neutral and we're not growing, but it's not horrible. now We've gone down for the past two quarters now. Okay, now we're going into our third quarter, and that graph just turned red. And the faces on the CFO, the CFO's face, it's gotten not happy face. Okay? So maybe they're picking up on that trend, but it could be a point of. There's a gap we have a financial gap from our forecast to our actuals. You know, this is, this is something that we are certainly paying attention to. We are actively addressing this is a thing, like this is a thing, that's the message. This is a thing. And it's all of my leadership team. I've asked all of my leadership team to take a look at this and we're actively working on it, type of discussion, type of messaging. And then within that, I think the option of a layoff could come up in a number of different ways. I was actually just talking to a chief of staff who was in a, when, in a similar situation to what I'm describing, and he was saying, Emily, I think my CEO is gonna get the question of, are you gonna do layoffs? And we were going through the talk tracking response to that, and how to coach his CEO through that. And what I said, and what I'll say to you here is saying something like. As we've just seen, we're not in the financial position. We, we would've liked, we thought, you know, the product was gonna do this, this, and this. We thought this was gonna turn around faster than it did, whatever, whatever it is. And so now we're looking at all options. Now we're looking at all options, is a phrase you can put out there. layoffs are one of those options. They are the absolute last option in my book. I have, you know, I'm actively working with my team on all these other things, and if you have specifics of one, two, here's the first two things that we're trying to do and that we're actively working on. You can describe those things and talk a little bit about what you and the team or what this other leadership team member is doing, what have you, but say, you know, we're working on this and here's, here's the next step on this, this, and this. And I've asked Carrie to go take care of this for us. And those are the things that we're doing. We're looking at all options on the table. And if you wanna go further into that, you might say something like, right now I would say layoffs are very unlikely, and be careful with your description here,'cause people are gonna hold you to that. But if you're like, they're, they're unlikely, then say right now at this point, everything I'm looking at right now says they're unlikely. And we're gonna go through these traps and go through these open switches before we get there. But we are looking at all options at this point. And if that's truthful and if that's where you are, and that's, that's the discussions you're having with your leadership team, I think sharing that general sentiment and general, um, notion with the larger group is, is fair and reasonable and it could be relevant and helpful for them if it's, and again, you can nuance that and kind of change it to whatever your situation and scenario is, but something like that might be useful. You might need to come in stronger, you might need to have your CEO go stand up there and say, um, as your CEOI have always been committed to being transparent and truthful with you, and that's important to me. And right now I need to tell you that layoff rounds are a possibility that we're having to look at. I don't like that. I don't like to be in that position and I'm actively pursuing every other option we have. And I have asked every single person on my leadership team to work on this and this. So option A and option B, and we are actively pursuing these things. I have asked and like specifically go through kind of what's happening there. Talk through, here are the factors at play here. Here's what we're looking at to make this decision. Here's what needs to happen in order for us to not have to go down the layoff path. Here's what you can do. If there's any specific action the audience can take, they love that because you've just given them some news. It cause energy in them. It causes anxiety and concern. okay, what do we do? What do we, how can we help? How do we channel this energy that we have? So it might be a specific task or a new task or an additional task people can do. It might be, look out for this thing. Or if you hear stuff around this, um, let your manager know. It might be, guys, you know, I know this is not great news to hear, but in any scenario, doing the best job you can in the role you have right now is gonna serve you in the team best. And any scenario here, please take care of our customers, take care of each other, um, follow the process, do the things you need to do to do a good job in the role you have right now. So whatever the call to action is from that announcement, I would, I would make that crystal clear for people. So you don't just wanna drop this news on someone and just have people kind of float around and wallow in it. You wanna give them clear, distinct action points if you can, even if it's just do the best you can at your job. Um, do continue doing an excellent job. We know that you're all top performers or whatever it is, whatever that talk track looks like. Um, make that announcement. Um. Whatever that, whatever that messaging needs to be, just make that clear call to action CTA, make that announcement.