How Not to Do Layoffs

This month, a Cloudflare employee filmed herself being let go from the cloud services firm via video call in a now-viral clip. In the footage, worker Brittany Pietsch challenges the reasoning she is given for her dismissal, which she’s told is tied to not meeting company performance expectations, and questions why her manager isn’t present for the meeting.

Later,
Cloudflare
CEO Matthew Prince issued a lengthy statement on X. “The video is painful for me to watch. Managers should always be involved,” he wrote.

Prince also addressed where he thought the company erred. “We definitely weren’t anywhere close to perfect in this case. But any healthy [organization] needs to get the people who aren’t performing off. That wasn’t the mistake here,” he wrote. “The mistake was not being more kind and humane as we did.”

The episode just goes to underscore that employees have more power now through social media—and that the public is receptive to worker stories of what went wrong in a layoff. “Enough companies have made missteps, that most of the world is willing to throw the company under the bus, and executives under the bus, first,” says change management consultant Leslie Ellis, founder of Meaningful Change Consulting in Charlotte, N.C.

Ellis, who works with large companies and government agencies, says that a layoff message that’s poorly delivered and received can threaten a company’s reputation—and make it harder to retain those employees who are still on the payroll. 

“You don’t want to decrease employee engagement and morale more than you have to,” says Ellis. 

Leaders are often reacting to fast-paced disruption, Ellis is quick to acknowledge. But they should avoid “knee-jerk” responses, she says, which can be driven by emotion. If executives don’t pause to consider and plan their desired outcome for a layoff—beyond, say, a cost-reduction goal—things can go awry. Ellis encourages executives to ask “How do we want people to feel when we do this change?” and “How do we want the public to perceive us when I do this change?”   

During the pandemic, Ellis says she advised one company during a layoff process that aimed to avoid a media “eyesore” if word got out. It took about four to six weeks of planning, she estimates, and it worked. “We stayed out of the media, it was beautifully done, and they were able to rehire many employees,” she says. 

On the other end of the spectrum, Ellis shared an anecdote that makes you cringe: She knows someone who was informed at the company gate that she was locked out, and out of a job.

That type of scenario illustrates what Ellis calls an “avoidant” approach to handling layoffs. “Sometimes there’s a mindset of, ‘This is going to be painful no matter what I do, so let’s just rip off the Band-Aid,’” she says. Executives, she adds, “almost have a belief there’s nothing they can do to make it better.”   

Her advice? Don’t skip out on the preparation, especially when it comes to equipping the employees who are tasked with delivering the layoff news personally. They have the hardest job in the process, Ellis says, and may shoulder the blame for the layoff, or wrestle with their own feelings of guilt. They should be “as ready as you can possibly make them,” she says.  

Ellis suggests that company leaders take time to speak with the employees conducting the layoff, so they understand what is happening and why, what’s needed from them, and the resources available to support them. For a manager who hasn’t laid off employees before, role-play can be a valuable exercise, she says. 

Finally, be sure to address the remaining employees soon after the layoff —ideally more than once—and communicate their value to the organization.

But don’t make false promises, Ellis warns. If additional layoffs are a possibility, executives should be transparent about it.

“People will jump ship—they’ll start looking for other jobs—if they think they’re being lied to, or not being told the whole truth,” she says. “In today’s job market, you don’t want to encourage more turnover than you have to.”  

Write to Catherine Dunn at [email protected]