It appears that the pace of layoffs in our industry, after growing throughout much of 2022 to peak in June, is slowing (at least according to Now seems as good a time write down some quick notes on layoffs without seeming like I’m sub-blogging (is that a word?) any company in particular. This is not a complete guide to doing layoffs. I think there is room and need for someone to write a definitive guide to doing layoffs well, but this is not that. This post is just some things I think about when I’m not in the middle of a layoff that I’ve found reduce the negative impacts when I do find myself in the middle of a layoff.

Layoffs are hard

Layoffs are hard, but if you stay in tech you’ll experience them from both sides of the table, and if you stay in leadership you’ll eventually be in a position where your actions can make them better or worse for everyone involved.

Logistically they’re hard because, like any significant organizational change, you’ve got a bunch of people working on something complex in secret. Planning for these sorts of changes happens in secret for a couple of reasons, even while the secrecy makes them harder to execute thoughtfully. The first and most important motivation for secrecy is during the planning phase you don’t know the details sufficiently to answer anyone’s questions. In the absence of answers people will fill in the gaps with their fears. Those fears can make the process more difficult and also can cause permanent ruptures in some people’s equanimity in relationship to the company. The second related issues is these situations tend to be fluid (hence the absence of details). I’ve personally been asked to plan two layoffs that never happened, as well as layoffs that in the end left my organization untouched. Third, the company will want to control external messaging, either because they’re a public company and have legal obligations around disclosure, or just to reassure their customers.

Layoffs are also hard emotionally. They often feel arbitrary and unfair. They run counter to so much of what we spend our days doing as leads: building teams and helping them grow. It feels bad to be laid off, and sometimes is quite scary. There can be a rapid redrawing of in-group and out-group boundaries. It strikes at a lot of what makes us tick as humans.

Some things you can do in advance to make it go smoother

  • Run a good business. Sustainability (aka managing our various risks be they financial, legal, technical etc) is the foundation of what allows us to employ people to do great work.

  • Make sure your teams have a good understanding of how the business works. Besides being important to build a good product engineering culture, a team that understands how the business works (or what the hypothesis is about how the business will work) will find it easier to understand why layoffs may make sense for the business. If by contrast your culture is focused exclusively on a life of mind uncluttered by commercial concerns a layoff will feel like a betrayal.

  • Know your numbers. Have an estimate of the “fully loaded” cost of an employee. Make sure that number includes recruiting and onboarding costs. Grounding your conversations, planning, ROI expectations, etc in dollars can significantly contribute to the kind of planning that makes layoffs less neccessary, as well as cut through a significant amount of politics and barganing (“how about we rescind the offers for Summer interns vs laying anyone off?”) when the time comes.

  • Know your ratios. What is your target EPD ratio? EPD to Sales, Marketing and HR? What is your target manager to IC ratio? What is your target senior to early career ratios? Having opinions about these things before you’re in right in the middle of a layoff will make planning much smoother. It also means that you can examine whether your ratios are the right ones as part of the layoff planning.

  • On the topic of ratios: having a healthy mix of seniority on your team means you’re less brittle as an org. Avoid the temptation to layoff your handful of rising stars to keep your one current star who is now a SPOF, not to mention a SPOF whose job satisfaction has likely declined without people to mentor.

  • Have plans and practice making hard trade offs between them. If your company struggles with the “we’ve added a new project/goal/etc so which one are we going to stop doing” style conversations, layoffs will also be a challenge. Avoid doing layoffs as a universal “hair cut”. It’s just reinforces the impression that leadership screwed up and has no idea what they’re doing. Layoffs can not be designed bottoms up, for much the same reason that annual planning can’t be run bottoms up. Leadership needs a strong opinion about the shape and goals of the layoff, with the details of the larger framework filled in by the teams.

  • It’s relatively common to lay someone off and then find out that you need to hire that person back, or someone else (or often several someones) to fill the critical role they were performing. That’s a clue that you aren’t managing to bridge the top down and bottoms up perspectives on the layoff, probably because information is being very tightly held.

  • Layoffs in addition to lowering costs should reduce the complexity of operating the company. If efficiency is one of the goals of the layoff, e.g. we’ve been papering over a lack of tools or processes with people, then we need to be realistic that output will significantly decline in the short term. Efficiency requires investment distinct from the larger goals of the company.

  • Calibration, career planning and performance management. It’s reasonable to expect your leads to know who is doing well and who isn’t in their orgs, as well as the career goals and growth interests of the people of their teams. This is about having clarity about what is and isn’t working, and who might be a good fit elsewhere in the company. Having these conversations in the middle of the layoff is way too late. Layoffs should not be used as a substitute for actively managing out folks who aren’t working out.

  • Doing calibrations, career planning, etc is a good prelude to having a ranked list of people you wish you could keep in the company that you can shop to less impacted areas of the company. Layoffs are no place for local thinking.

  • Layoffs often come with promotions and people receiving new responsibilities. It feels especially bad for everyone involved to be sending out celebratory emails in the middle of a layoff. Ideally get promotions out of the way weeks or months before layoffs. Alternately know that there will be time to celebrate people later.

  • Relatedly make sure your most important folks know they’re important, feel appreciated and are excited about the future before you’re in the middle of navigating the delicate balance of being excited about the future while respectful of the people who are leaving.

  • Normalize the idea that not all companies and not all people are a good match for each other, and that doesn’t necessarily reflect poorly on anyone. (though as a company you’ll want to work on being a good match for as many people as possible from both a pragmatic hiring standpoint as well as a being decent humans perspective)

  • Practice having a discipline around confidential projects. Have a practice where everyone who has been informed about a topic (aka “read in”) is listed in a shared doc, or added to a shared Slack channel etc. Discussion needs to happen before to manage logistical issues and to process emotions. People need people to talk to. Expecting them to only have conversations in their hierarchical relationships just means they’ll wing who they talk to. Ideally don’t make a layoff the first time you’ve ever run this playbook as a company.

  • Your everyday threat model should include the idea that someone may freak out and get angry. It should also include the idea that someone’s accounts and tools may get compromised. Layoffs are not the only time an employee may either be pissed at their employer or that a bad actor maybe using an employee’s credentials. If you have to terminate everyone’s account before informing them they’ve been laid off I’m concerned about your internal security controls. In which case please do some tabletop on crisis management and security response going into layoffs.

  • Layoffs, like re-orgs, often end up with major systems unowned. This will be an additional stress on the people who are staying and creates cynicism about the quality of the planning. Have a playbook that you’ve run for what happens to a system when the team supporting it ceases to exist before you do layoffs.

  • As a leader, take time off before the layoff is announced. You’ll need to be at your best once communication starts rolling out. One of the most common and serious mistakes for a leader is to put all their energy and emotions into planning the layoff, and then be emotionally unavailable and impatient for the days and weeks when most of the company is processing the surprise.

  • Similarly clear your schedule. You may feel like the hard work is behind you and on to the next problem, but you need to be available to people who haven’t been part of the conversation until now and for whom this is all new and shocking.

  • Everyone has a friend who is leaving, and everyone can imagine themselves being laid off. Treating people well is not just the severance agreement (though that is important!), but also respecting that the people leaving were part of this team. People who are staying and people who are leaving have different needs around information and logistics, but everyone deserves to be in the All Hands where we talk about why we’re doing this.

  • Anonymous questions are often a major source of toxicity most of the time, but you need to have a system in place for taking anonymous questions in the nadir of psychological safety that follows a layoff. Best practice have the questions go to a private inbox (e.g. using a Google Form) vs some sort of public moderator. That keeps questions focused on being questions vs statements to the audience.

  • In the immediate aftermath of layoffs attrition tends to accelerate and hiring will get harder. Not doing a deep enough cut and then having to do another round of layoffs is a well documented failure mode for layoffs. It is equally a mistake to not have a plan for staffing in the wake of the layoff. At a minimum don’t layoff your entire recruiting team in your layoff.

  • Practice having difficult conversations and projecting empathy as leads. You want your managers to be able to participate in delivering the messages of the layoff as they have the relationships and, assuming they have the skills, are best positioned to make the process humane. This is not the right time for your manager to be having their first hard conversation. (Nor is it the right time for your head of HR to be experimenting with being authentic and empathic for the first time.)

  • Ensure that your managers understand that while it is critical to maintain their integrity and authenticity, freelancing communication in a difficult situation makes it worse for everyone.

As a leader a key job is to ensure that your company is a well run system that is a healthy and productive place to work. Layoffs are a major stress to that system, violating many of our implicit social contracts, breaking relationships, highlighting historical mistakes and failures, and bringing us face to face with the underlying business imperatives of the company. For a company that isn’t ready for them they’re a major rupture in the functioning of the system. Getting ahead of that and laying a healthy foundation is how you improve outcomes for everyone.

Like I said at the top of the post, this is far from being a complete how to on layoffs, just some tips and frameworks that have helped me. What are yours?