The human (and inhuman) approach to layoffs

Millions of people are losing their jobs. That means corporations need to inform them they’re out of work. Carta did its layoffs well, while Bird behaved abominably.

Bird shows how a corporation can behave like an ass

There’s not much demand for sidewalk scooter rentals right now. As a result, the scooter company Bird laid off 406 people, one third of its workforce.

Such actions may be inevitable right now, even though the government’s Paycheck Protection Program aims to reduce them. But this isn’t about whether to lay people off — it’s about how to do it.

Here’s how The Daily Beast described the scene at Bird:

Over 400 employees of scooter sharing start-up Bird were laid off via a two-minute Zoom webinar last week, in which a “robotic-sounding, disembodied voice” informed staffers that their roles would be affected by a mass layoff. According to dot.LA, 406 employees—between 30 and 40 percent of Bird’s workforce—were invited to a Zoom webinar called “COVID-19 Update” last Friday morning, giving them no indication that they were about to be laid off. The meeting reportedly started with five minutes of silence before a woman’s voice came on the webinar. She said it was a “suboptimal way to deliver this message” before stating that there had been a decision to “eliminate a number of roles at the company.” “Unfortunately your role is impacted by this decision,” she said.

The only indication that you were laid off is that you were included in the webinar. According to dot.la:

[S]ome grew suspicious when they noticed the guest list and host were hidden and they learned only some colleagues were included. It was also unusual they were being invited to a Zoom webinar, allowing no participation, rather than the free-flowing meeting function the company normally uses. Over the next hour, employees traded frantic messages on Slack and searched coworkers’ calendars to see who was unfortunate enough to be invited.

“It should go down as a poster child of how not to lay people off, especially at a time like this,” said one employee.

The voice on the Zoom webinar was not the CEO, Travis VanderZanden. His statement after the fact was this: “We did NOT let employees go via a pre-recording. It was via a live zoom mtg (not ideal either) b/c we’re all WFH during COVID. Video was turned off which we thought was more humane. In retrospect, we should’ve made 1on1 calls to the 100s impacted over the course of a few days.” Bird’s statement to the press said, “A live speaker delivered the news in real time over the web-based call and a slide was projected outlining additional information including four weeks of pay, three months of medical coverage and an extended timeframe to exercise options.”

Minutes later, people’s computers stopped working. Dot.la reports, “Some employees, who had the day off or were working a later shift, did not understand why their computers were restarting and why they could not log back in. Others tried in vain to join the webinar and got a message saying it was full, likely because Bird’s webinar license didn’t accommodate enough attendees. Some employees did not realize what was going on until they saw a brief TechCrunch article posted at 11:26 a.m.“

This is obviously brutal. Bad news like this should be delivered by the CEO. There should be a web site explaining policies. Managers should be available to speak to workers. And workers who were dealing with the challenge of working from home in a pandemic deserve, at the least, a little more sensitivity.

Carta does much better

Carta is a company that helps other companies and investors to manage sharing and management of stock and stock grants.

Carta’s CEO Henry Ward posted on Medium the announcement he made at his all-hands meeting, during which he announced the layoffs of 161 people. Here are some excerpts:

Over the last few weeks I’ve talked about the work we are doing around recession planning. I also said that layoffs were likely but I have been delaying any decisions around it for as long as possible. Today is the day I can’t delay any longer.

First, I want to apologize if I sound matter of fact or even robotic. It is my way of coping. I wrote a script and I am reading from it. There is a lot I need to say and I don’t want to forget anything. And I’m worried I may not get through it all without something to lean on.

The facts

Let me start with details. Today we are going to lay off 161 Carta employees which is 16% of our company. The headcount reduction is not uniform across the company and different teams will be affected differently.

If you are one of those affected with the layoff, after this meeting, you will receive an invitation for a meeting with your manager or Trifecta lead. If you do not receive a meeting invitation by 10:30am Pacific then you are unaffected. If you are contacted, you will meet with your notifier and they will talk you through the departure process.

The moral conflict

In town hall a couple of weeks ago I said that there were two perspectives when making decisions about layoffs. The first is the shareholder perspective where reducing costs and protecting cash are what matters most in a recession. The second is the employee perspective where nothing is more important than saving jobs and helping employees as the world heads into unemployment levels the world has not seen since the Great Depression.

In each of these two perspectives, shareholders and employees have clear visions that are both unambiguous and morally correct even while at the same time being diametrically opposed. That is the conundrum for ceos. Ceos sit between shareholders and employees and wish they could do both.

Every ceo who is planning a layoff has to address this moral conflict. I chose to manage my conflict by taking the shareholder perspective in deciding who (and how many) should leave and taking the employee perspective on how to help those who leave.

Notice how different this is from the Bird layoff. It is coming from the CEO. Ward is not robotic, he explains the challenge he is facing and the reasoning behind the move. He respects the intelligence of his workers and takes the time to explain things to them. It doesn’t restore your job, but it does make you feel you were more than a cog in a machine. Later in the communication, he states that he personally decided on each employee’s job, taking full responsibility, and making it possible for people to continue to respect their managers, whether they’re staying or leaving.

He then goes on to explain that each employee laid off will get three months of pay and that Carta will pay their health insurance for the rest of the year. And he started an alumni Slack channel to keep people connected.

Here’s the end of the communication:

After we get off this zoom, if you are affected, you will receive invitations for your departure meetings this morning. After your meetings, we will start turning off access to various systems but we will keep your slack account until the end of the day. It is important that you be able to say goodbye to your friends and colleagues. And it is important that they get to say goodbye to you. To that end, we’ve created the channel #goodbye where affected people can leave personal contact information and anything else you’d like to share.

For many of you, this is the last time I will get to speak to you in a company-wide all-hands. I’ve thought a lot about what I want my last words to be. I thought about how all of you would be feeling. About how you will remember today, weeks, months, even years from now. I thought about if there were things I could say to make today easier for you. And if I had any parting wisdom or advice to offer.

After many restless nights I realized I just wanted two say two things to all of you.

First, I am very sorry. I’m sorry that we are going through this as a company. And I am sorry that all of you are going through this as Carta employees, Americans, and human beings. It is a scary and sad time. I remember 2000 and 2008 and how much fear people felt. This is worse. I hope all of you connect with your friends, family, and support networks. This is not a time to self-isolate. This is a time to ask others for help.

Second, I want to say thank you. I am privileged to have worked with all of you. Thank you for having been a part of our company. Thank you for being a part of our lives. Thank you for coming to Carta. We are all better for it.

See you on the Carta Alumni network.

It’s no fun to lose your job. But at least this is a CEO treating his workers as valued human beings.

This is not the end of the world

At least I hope not.

Work is full of human relationships. When people lose their jobs, those relationships don’t stop. They remember how they were treated.

I’ve lived through several layoffs. I lost my job once, and the other times, my friends lost their jobs. It was hard for the people who stayed, not just for the people who left.

When life is hard and work is hard, think first of how you can behave like a fellow human being. You’ll feel better about it. And when things start moving in a positive direction again, the relationships you preserved, rather than trashing, will be among the most valuable assets you have.