laying off a good employee

A reader writes:

Due to the recent economic downturn, I am obliged to fire one of my best employees: he is proactive, his work is always sharp, he is a team player, and he is an evangelist of the vision of the company, not only in his department but in the entire company. Unfortunately we are currently in “survival mode” and his position (software developer) is not fundamental for the survival of the company. So I have to let him go.

I’m not only sad because I’m losing a great person, but also because I don’t want to lose his trust: he is at the top of my list when we will start hiring again – hopefully in a few months… But how could he accept the job again after we clarified that his position is not fundamental for the company’s survival and therefore he could be let go again?

Well, first, make sure you don’t say you’re firing him, since that implies he did something wrong. You’re laying him off. Firing is for cause, whereas a layoff is about eliminating the position.

Now that that’s out of the way… well, this sucks. And all you can really do is tell him what you’ve said here. Tell him all the reasons you value him. And tell him the reality that you’re being forced into by finances.

You should also tell him that he’s at the top of your list when you’re hiring again. You’re right that he might be hesitant to return because he’d question his future job security. But he deserves to be able to make his decisions with full, complete, honest information — and yes, his decision might be not to return in the future, if he judges it’s not the best move for him. But all you can do is be straightforward with him, give him as much information as you can, and respect his decisions.

Actually, that’s not all you can do. You can also help him in the way you handle the layoff. Specifically:

  • Tell him as soon as possible. Don’t leave him in the dark now that the decision has been made.
  • Be as generous as you can in his severance package.
  • Continue his health insurance if you can, for as long as you can.
  • Help with job-hunting leads, including setting up introductions to others who may be able to help.

You’re not alone in going through this, and neither is he. Good luck to both of you.

{ 11 comments… read them below }

  1. HRD

    Sound advice. Having just had to make c.10% of the workforce redundant we have also lost some good people. We made it clear that it was the role that was being made redundant and not the person. Also, we use an alumni process to keep in contact with good people, however they leave keeping in contact and keeping them updated. Social Networking tools can be great for this too.

  2. A Girl Named Me

    The only thing I can add here is that while you can tell him you hope he’ll be rehired in a few months, there are no promises.

    You want to give him hope, but giving him too much to hang on to could keep him from looking for new work. “If it’s just going to be a few months, I’ll live off of savings and won’t find another job.”

  3. Inside the Philosophy Factory

    Before your lay him off, write a glowing letter of recommendation. Give it to him with his file– or, at least let him see it.

    This will assure him that he’ll get a good recommendation from you.

  4. Anonymous

    I’m sorry, but while the advice given to the person who asked the question is good, the question itself poses some interesting bullshit.

    First, what type of company has a software developer (in a department presumably about IT or software development-related activities) but lists such job as non-essential to the bottom line to the company? I’ve worked for small and large companies. Developers fall into one of two camps: 1. The lifeblood of the firm (it’s a software dev company and this is what they do). or 2. They provide maintenance support to all of the various applications the firm runs.

    Otherwise, what would the developer be doing all day?

    Second, as almost anyone with a MBA will tell you, layoffs are almost never the answer to financial difficulties. You cut non-essential people 24/7/365 – they should NEVER be on staff. But a layoff to survive is problematic, because presumably, you’re laying off the exact people whose activities should be able to drive revenue.

    So if you’re really in a survival mode layoff, what you’re really saying is that the company is about to fold and you’re trying to stave that off by stopping payroll activities. As I said before, that’s crap.

    Either have the guts to ride the pony until the pony dies, or shoot the pony while it’s still somewhat alive. But don’t sling an almost-dead horse over your shoulder and expect that you’re going to somehow find water, medical care and the horse’s willingness to live on. It just doesn’t work.

    The guy you’re laying off is going to take it hard if he’s that great of an employee and that evangelistic. By offering any of the placating gestures of “you’re first on our list for rehire”, you’re effectively saying “sorry” and then shooting him in the stomach so that he bleeds out slowly. It’ll perhaps make it feel nice at first – but in the long run, as A Girl Named Me said, you’re also possibly giving him false hope of return.

    If you REALLY want the company to survive, on the other hand, survival mode should include: 1. salary reductions across the board (everyone, including the CEO, takes a hit… the higher you are, the harder the hit). Note that it’s temporary, but do it. Plan that some people will leave on their own because they don’t like the salary reduction – these folks weren’t going to stay around anyways in the long run. 2. Everyone who is a good employee stays. Sure, revamping your product-lines, re-evaluating business structure, etc, are all good things. But it shouldn’t be a knee-jerk reaction to survive… it should be part of a strategic plan to come out swinging. 3. Keep moving forward. If you eventually have to end it all, end it together – not in pieces (it never works to cut off the limbs and hope the body survives).

  5. Anonymous

    If an employee is so genuinely brilliant, you keep them on and cut costs in other areas.

    The companies that have laid people off during the recession are going to suffer eventually when the job market starts to balance out again. As their recruitment costs will be astronomical when they struggle to retain existing staff and laid-off staff are unwilling to return.

    Bluntly, I hope the employee has since found a better company to work at and gives you the finger when you ask him to come back.

  6. Ask a Manager

    Wow, anonymous, I think that's overly harsh for this particular situation. It's clear the letter writer is torn up about this and has concluded he doesn't have a choice; plenty of businesses don't have a choice in this situation. And it IS possible to lay someone off with dignity (not to say it always happens that way); judging from this guy's letter, I highly doubt the employee is giving him the finger.

  7. Anonymous

    If an employee is that good and a true evangelist for the company's vision, then a company should have the sense to realise that employees of this calibre are hard to find and are indeed "fundamental to survival".

    Good employees are the lifeblood of a good company, and no organisation can achieve anything worthwhile except through its people.

    Frankly, such a lay-off is wasteful, destructive, the very opposite of cost-effective and utterly indefensible. As another contributor has commented, how the hell do you expect the body to heal when you've amputated the limbs?

    And yes, the companies who have cut staff are going to have major recruitment problems when everything gets back on track as they discover that lay-offs are a completely false economy. In some cases, it's going to take years before a company can genuinely match the service levels it used to offer through its experienced staff prior to the downturn.

    I have no sympathy for the original poster. I'm not interested in how difficult he finds it making good people unemployed. He still has a job. So cry me a river.

    And I hope that said employee moves on to better things. I doubt very much he would ever feel sufficiently motivated returning to a company that has proved it will kick him to the curb at the first sign of trouble.

  8. Ask a Manager

    Sorry, Anonymous, I can't agree. It's clearly not true this guy was let go "at the first sign of trouble." And I wonder what your experience has been with this — have you been in the position of having to make hard financial decisions at a company? If, for instance, the company was eliminating this guy's entire function, it's not a crazy decision.

  9. Anonymous

    Admittedly, there's no context here. We don't know the size of the company or what they did. Yes, of course tough decisions have be made during this downturn.

    Bluntly, I still have no sympathy for an employer who rewards loyal staff by depriving them of a livelihood and shoving them onto unemployment.

    I note that this article was posted in April 2009. It would be interesting to see if the poster did show some integrity and has indeed asked the employee back if the company did get back on track.

    Hopefully, the employee has found something better and wouldn't give his former employer a second thought. Personally, I'd tell the employer – in a polite and professional manner – to shove it. I have been laid off twice before snd both times was asked to come back 6-12 months later. Both times, I declined and it's been absolutely the right decision. Move forwards, not backwards.

  10. Anonymous

    how can companies revise their performance appraisal procedures and processes to reduce the problem of employing people who don’t fit?

  11. Glenn

    Also consider that some companies function based on client workload. When the workload decreases, the need for manpower also decreases. Cutting salaries goes only so far when most of your employees are blue collar and working paycheck to paycheck. Affordable salary cuts (affordable for the employee, and within legal limits) are the proverbial band-aid over the stump of your company’s severed leg.

    On a side note: Of course, if the CEO and COO and all below agreed to take a percentage pay decrease in order to save the surplus of staffing, I would then ask, why should I, or anyone above me, who has put in their time, stood out, and been elevated in the structure, resign a portion of their salary in order to allow a group of people to ride the clock and wait for work to land on their desk? I worked very hard to get where I am, and it’s no coincidence I am where I am. The people who survive cuts are the people who go above and beyond to be noticed. We reap what we sow.

    Anyhow, lay-offs, in these cases, are the only practical option. However, I do agree that this damages the company’s knowledge base, and possibly for a very long time, depending on whom you let go. Recovering from the loss is a long road. And I would add that this also affects the morale of the remaining employees negatively in most cases, subsequently compounding the damage to productivity and quality of work. As a survivor, it’s good to know that you still have a job, but seeing the lay-off take place let’s everyone know that the threat always looms in the distance.

    If I’m ever forced into lay-offs, I do my best to work my connections to find the affected a new employment opportunity, or opportunities. Some of them have gone on to become successful with other companies, and I’m glad I was able to help make that happen.

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