There’s a right way to sack people

Redundancies. Lay-offs. Downsizing. Whatever you call it, it’s sacking people through no fault of their own. It hurts and it can be damaging but sometimes it’s unavoidable.

There are right ways of doing it, however, and a couple of good examples have emerged recently as a welcome contrast to the thoughtless carnage we are seeing elsewhere.

Stripe were the first to come to my notice when they announced 1.100 layoffs (about 14% of headcount). Early on in the message to employees, the CEO states “There’s no good way to do a layoff, but we’re going to do our best to treat everyone leaving as respectfully as possible and to do whatever we can to help.” That’s a fundamental statement of intent that should not be extraordinary but, sadly, it is.

First up, they take full responsibility for their poor decisions, overestimated growth from the pandemic and allowing operating expenses to rise too quickly. It’s their fault. That’s what grown-ups do, they own up to their mistakes and take responsibility for the consequences.

Secondly, they back up their pledge with:

  • Generous severance pay
  • Payment of 2022 bonus
  • Unused Paid Time Off to be paid
  • 6 months healthcare continuation
  • Protection of vesting rights
  • Career support
  • Immigration support

This is just reasonable, respectful, caring behaviour. It’s generous but not excessively so. It’s only remarkable because of the many companies that do the absolute minimum, or even try to avoid that.

They made the announcement in a memo because they are a distributed company. However, they promised a 1-2-1 conversations with a Stripe manager within the next 24 hours because that human connection matters. It’s part of treating people with dignity and respect.

I also saw how DoorDash had dealt with laying off 1,250 employees and they seemed to be operating from the same playbook.

Firstly, CEO Tony Xu owned up to his mistakes and took responsibility. “…we were not as rigorous as we should have been in managing our team growth. That’s on me.”

And then he detailed the support:

  • Generous severance pay
  • Healthcare continuation to March 2023 with option to pay for coverage for 18 months 
  • Protection of vesting rights
  • Career support
  • Immigration support

He continues “While there is no great way to manage this process, we strive to treat each of you with respect and integrity. Each of you who is impacted will have the opportunity to speak to a leader this week.” Because the human connection matters. It’s part of treating people with dignity and respect.

The tech sector is shedding people across the piece but how many of them meet the standard set by these two? It contrasts most starkly with Musk’s cavalier and sociopathic handling of sackings at Twitter (I refuse to cloak his brutality in euphemisms).

People deserve to be treated with respect, decency and dignity. Whatever the circumstances. 

With these examples of how to do that, there is absolutely no excuse for doing otherwise.

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