How to handle a layoff

On tech crunch there is an entry about how to handle a layoff. It is an e-mail from Mahalo CEO Jason Calacanis. I think he makes a lot of good points here. I have never been a CEO, but I have been laidoff and I have been survived layoffs at a company. This does not make me an expert, but he helps me understand what companies face.

1. Make the cuts as deep as you can. If you have to eat a pile of S*** you should make sure you finish it in one sitting. Cut to the bone. Cut so much that you will not have to cut again.

2. Realize where cuts will effect your business. I worked in customer support after layoffs. The first time people acted like cutting customer support staff would not effect the quality of customer support. If you do not want to effect the quality, you will need need to reduce the amount of support you offer. If you cut workers do not expect the remaining workers to just pick up their slack. That can make the situation worse.

PS. I support tech crunch posting this e-mail.

In the software world there are three knobs that can be changed, Features, Schedule, and Quality. Before you make the layoffs you need to realize which of these knobs will need to be adjusted. You will not be able to lay people off and hope everything goes as well as before. Most companies will say they need to still be competitive after layoffs and are not willing to let off their foot off the peddle. This is unrealistic and harmful to the business in the end. If the company is to succeed they need to be truthful about what will happen.

3. Define what is important for your workers and your management. Every tech company is already putting 11 pound of work into a 10 pound sack. Even before your layoffs people are already working hard and pushing to their limits. You not only need focus people on what is important, you need to tell them what is not important. You need to tell people.

4. Support you managers and have them support the employees. After a layoff employees can feel like they are in danger. They need support. They need to know what the management wants and that the management has a plan. The feeling of dread that things are not going to get better can cause another round of layoffs.

PS. I support Tech Crunch posting this e-mail. It is silly for Jason Calacanis to think this would not get into the public.


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