Lemon #43. The right way to lay people off

Lemon #43. The right way to

While reading ‘The hard thing about hard things’ from Ben Horowitz, we learned about how lay people off in a right way: 

  • Step 1. Get your head right

When a company fails to hit its financial plan so severely that it must fire the employees it went to great time and expense to hire, it weighs heavily on the chief executive. 

During a time like this, it’s difficult to focus on the future, because the past overwhelms you – but that’s exactly what you must do. 

  • Step 2. Don’t delay

The time elapsed between making that decision and executing that decision should be as short as possible. Employees will question managers and ask whether a layoff is coming. If the managers don’t know, they will look stupid. 

  • Step 3. Be clear in your mind about why you’re laying people off

Admitting to the failure may not seem like a big deal, but trust me, it is. «Trust me». That’s what a CEO says every day to her employees. Trust me: this will be a good company. Trust me: this will be good for your career. A layoff breaks that trust. In order to rebuild trust, you have to come clean. 

  • Step 4. Train your managers

Training starts with a golden rule: managers must lay off their own people. They cannot pass the task to HR or to a more sadistic peer. Why so strict? Because people won’t remember every day the worked for your company, but they will surely remember the day you laid them off. The reputations of your company and your managers depend on you standing tall, facing the employees who trusted you and worked hard for you. If you hired me and I busted my ass working for you, I expect you to have the courage to lay me off yourself. 

  • Step 5. Address the entire company

The people who stay will care deeply about how you treat their colleagues. Many of the people whom you lay off will have closer relationships with the people who stay than you do, so treat them with the appropriate level of respect. 

  • Step 6. Be visible, be present

After you make the speech telling you company that you’ll be letting many of them go, you will not feel like hanging out and talking to people. You’ll probably feel like going to a bar and drinking a fifth of tequila. Don’t do this. Be present. Be visible. Be engaging. People want to see you. Help them carry their things to their cars. Let them know that you appreciate their efforts. 

Ben Horowitz @ The hard thing about hard things.

Jorge Moreno

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