Letting Them Go

No matter how many other changes and cost-cutting measures you implement in bad economic times, you still may reach the point where you have to reduce your workforce in order to remain a viable company. This can be a useful option if it gives you a chance to get rid of some deadwood, but unfortunately you may have to let good employees go, too. How you handle layoffs now can have an effect on your company’s future performance.

First of all, once you make the decision to do it, then do it. Don’t let rumors fly, because if someone knows layoffs are coming, soon everyone will know it, though they may be a little fuzzy on the actual facts. You can reduce stress levels dramatically, both for those getting laid off and those staying on, if your employees trust you’ll be honest and transparent about what’s happening.

When the time comes to have “the talk,“ do it in a dignified manner. Don’t do it by e-mail, don’t do it by phone, do it in person (unless you’re laying off remote employees across the globe, of course). Nobody likes getting dumped via SMS, whether by a significant other or a boss. Don’t do it front of other people, and try to avoid putting them in an awkward position with their peers...this news can take a while to process, so maybe do it at the end of the day so they can head home without having to explain anything to their co-workers.

When you have the talk, be honest with them, but if they’re poor employees, don’t try to kick them while they’re down. If the layoff is coming purely because of economic reasons, and not because of their work, let them know that. If, on the other hand, they were a poor employee to begin with, you don’t really need to tell them that. Don’t lie and say you’re sorry to see them go, but at the same time don’t tell them you’ll be happy to see them walk out the door.

Let them know what you’re willing to do to help them. This is something they need to hear at this low point. You may have contractual obligations, like severance pay or continuing health benefits, and have some information prepared about that which they can take with them (they might not be thinking too clearly at this point, and may not remember everything you say). If you will provide any benefits beyond contractual requirements, such as some sort of transition assistance, let them know that too. If you’re willing to write them a strong recommendation, or you’d like to bring them back on board when things improve, you should definitely tell them that now.

At the same time,don't lie to them. If this is a poor employee you're letting go, don't offer to be a reference, and don't suggest you might take them back. If you're looking for a clean break, then make a clean break. If you promise something you aren't willing to deliver, you're just encouraging them to come back and bother you.

Speaking of references, you should be prepared to offer good references for your good employees, but as for the bad ones, it's best to just remain silent. In recent years bad references have sometimes led to legal problems. An attorney can offer you advice on the legal aspects of this, but a good rule of thumb is that if you can't say anything nice about someone, don't say anything at all...it works as well here as it did in grade school. Don't worry, if you decline to provide information beyond confirming employment, a potential employer will probably take a closer look.

Why worry about any of this? Well, first of all, because people deserve to be treated with respect. From your perspective, though, there are also good reasons. First, you may want to hire these employees back when things get better...after all, talented Creatives who meet your unique requirements may be tough to find. Even if you don't bring them back right away, Creatives tend to move often between firms, so they may be a possible hire sometime later in the future. In both cases, it's best if you remain on good terms with them, and the way you handle the layoff is something that will stick with them. Finally, your firm's reputation is as important among potential employees as it is among potential customers, since, as a creative firm, you're often selecting among a relatively small pool of Creatives. Word gets around, and if you treat people with respect, that makes you look good. Treating people badly, of course, has the opposite effect, and you don't need that.

So, do the right thing. If you must let people go, do it wisely.