How to do layoffs in a compassionate way
This week’s topic is a tough one: Layoffs. As we continue to live through an era of economic uncertainty, more and more companies all over the world are taking the drastic step to downsize in order to stay afloat and survive.
This blog post would have been very different had I written it a few years ago. I never understood how a leader could ever make the decision to lay off their people. To me, it was impossible to say you are a “people-first” organization and then turn around and lay people off. And while I’m still not a fan of layoffs and think they should be the last resort, my perspective changed a bit when I found myself in the position of transitioning my own company two years ago—and coming to the painful realization that we couldn’t take everyone with us.
In case you’re new here, let me give you some quick context to get you up to speed: For 14 years, I owned and operated a cleaning business while also doing leadership training and workshops all over the world. Over time, I realized that my true passion was leadership development—not cleaning—and in 2021, I decided to step away from cleaning and fully transition our business to a leadership development company. It was the hardest choice I’ve ever made, and I made it because I knew that I couldn’t keep living a life that wasn’t true to me. But going after my dream meant that we couldn’t take every person on our team with us. It wouldn’t have been sustainable or financially possible.
Now, almost two years later, I have extreme empathy for compassionate leaders who find themselves having to downsize. I know many people who are in this difficult place as we speak: I’ve recently had some really tough conversations with clients who have made the incredibly hard decision to lay people off in order to stay in business, and my heart goes out to everyone involved. These are amazing people and amazing leaders who are trying to do right by their people and by their organizations, and letting people go is the last thing on Earth that they want to do. Through their stories and my own experience, I now understand that sometimes, layoffs are the best option for the long-term health and sustainability of the organization.
That being said, I think there’s a right way to approach layoffs—and a way leaders should never approach them. Unfortunately, there are plenty of recent examples of how not to do layoffs. For example, I was shocked to read about the CEO who abruptly laid off 900 people in a cold, quick Zoom call. And I’m struggling with how tech giants like Google and Meta could lay off tens of thousands of people via email, some of whom were on parental leave when they found out.
To me, that isn’t human leadership. As hard as layoffs can be, I believe there’s a way to do them with integrity and in a way that does right by your people and aligns with your values. It’s possible to make people feel truly cared for as they transition out of your organization.
I’m really proud of the compassionate way we handled the transition of our business. While it was hard, it was loving and beautiful at the same time. We came together as a team in a way that we had never come together before, and we supported each other every step of the way. I want to share how we did it and the steps we took in order to achieve that outcome, just in case you or your team ever find yourselves in this incredibly difficult place:
We told our team as soon as possible. When my leadership team and I made the decision to transition our business, it was January of 2021. I told our team members a couple of days later, even though the actual transition wouldn’t happen until May of that year. I wanted to give them as much notice as possible. It was during the height of the pandemic, so I told them in a company-wide Zoom meeting, and we had a raw, human conversation. We didn’t have a solid transition plan—heck, we didn’t even know how the transition would work. It might sound risky to share news before you have a full plan, but I wanted to be authentic. Too often, these conversations take place behind closed doors. Leaders wait to announce huge decisions until they have a clear plan. But I think doing so causes a lot of unnecessary pain: Waiting to announce a decision and plan you’ve already made can make people feel like they’ve been lied to. It causes distrust. It robs people of the time they need to process and plan their next steps. So even though we didn't have all the answers and even though it was very vulnerable, we let our team into that conversation shortly after we had the realization that we were going to transition the company and wouldn’t be able to take our whole team with us.
We were transparent in our communication and made space for people to share how they felt. We committed to regular and frequent communication throughout our transition, even if we didn’t have any updates to share. Every week, we had a team-wide meeting on Zoom where our people could learn about progress and updates. I shared two things each meeting: 1) what we absolutely knew for certain, and 2) what we didn’t yet know and were still trying to figure out. I thought it was important to share the second piece and to be honest about the fact that there was a lot we didn’t know. I think that leaders are reluctant to share that side of the coin when going through hard times because they feel so much pressure to be “strong” and not admit weakness. But again, pretending you have the answers when you don’t can lead to distrust. When you’re facing hard times, I understand wanting to keep people focused on the positives and trying to instill hope, but that kind of positivity can become toxic when we ignore the reality of the situation. Change is hard, especially when changes in your organization impact people’s lives. No amount of positivity can cause someone to forget how difficult that is. It’s important to make space for all the feelings. In our weekly transition meetings, we gave people space to ask questions and share their fears, concerns, frustrations, and everything in between. We made the time to connect and sit in the questions and uncertainty together.
We offered support to help people find their next step. Once we announced the transition, we didn’t force anyone to stay with our company. We told them that if they wanted to move on before the transition date, we would absolutely support that decision. And, if they wanted to keep their job for the 4+ months until we transitioned and move on after that, that was okay, too. Even though we had obligations to continue to serve our clients throughout that time, we wanted our team members to do what was best for them. In addition to that, we wanted to help every person who wanted it with their next steps. We helped by updating their resumes, writing letters of recommendation, and even practicing job interviews. They also had the option to continue with their current jobs after our transition: Two of our local competitors would be taking care of our clients after we exited the cleaning business, and both offered jobs to any team member who wanted one. No one actually took those job offers—our team members decided they wanted a break from cleaning, too—so we made ourselves available to help them look for additional opportunities elsewhere and made sure that each person felt as prepared as possible for their next step. I think this kind of approach is uncommon in layoffs, but it should be the norm: As leaders, we must take an active role in helping each person find their next step and doing what we can to ensure a seamless transition for them. That is when people feel cared for. Not everyone will need that support and not everyone will take you up on your offer to help, but making yourself available to pour your time and energy into helping your people shows you really care.
We thanked people for their time and commitment. Our last day as a cleaning company ended with . . . a party. I know, it sounds weird. But we wanted to celebrate the journey we had all been on together. We had food, cake, and we even invited former team members and alumni who had worked with our company years ago. Even my mom and dad were there. This was the ending of a big chapter, and we wanted to reflect on all we learned and thank our team for helping us get to the place where we could start chapter two. I remember how meaningful it felt to sit around the table and listen to each person share their favorite memories over the years—some of them were even memories of the transition itself. We had many team members who chose to stick with us right until the very end, and we absolutely couldn’t have done it without them. To thank those people, we surprised them with a bonus payment at the end of our party. It was a gesture that showed how much we appreciated their trust and loyalty during such a challenging time.
When I think back to the early days of our transition, there were a lot of things I didn’t know, but there was one thing I knew for sure: We were going to be compassionate and care for our people every step of the way. And I’m really proud of how we held to that commitment. We believed that this really difficult moment in our company could also be a time of extreme care—and that is what I want to read about when I see layoffs in the news.
Sometimes, downsizing a company is necessary. While we hope this never happens, if it does, I believe leaders should ask themselves: How can we do this in a compassionate way? How can we be honest and transparent? How can we give people time to process? How can we work together on the transition plan? How can we invest our time and energy in helping our people find their next steps, especially when we consider that those people have given so much time and energy to our organizations?
I know it’s possible to create an experience where someone can look back and say, “Wow, that was really hard, and I felt cared for.” That should be the goal.
To the human leaders who are making really difficult decisions: I see you. Lead with your heart and extend compassion to your people every step of the way—and give yourself compassion, too. This too shall pass.
Big hugs,
