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Reorganizations or Layoffs

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With a difficult reorganization or when faced with layoffs of people on remote teams, several key risks need to be managed:

  • Preventing post-layoff quitting.

  • Trauma and low morale post-layoff.

  • Minimizing disengagement.

  • Rolling layoffs or repeated reorgs.

Your distributed team is going to have a harder time processing and recovering from this kind of news than a co-located team will, because shared venting and healing is harder when you can’t go for a meal or a drink together. People will feel isolated alone at home behind a computer, and this isolation poses a bigger threat to a remote team’s engagement after layoffs.

A bad outcome in this situation is post-layoff quitting: the remote environment can be just too sad and lonely, and confidence and morale so low, that key team members leave for a fresh start.

cautionThe worst outcome that the company leadership can cause is rolling layoffs: realizing after one wave of layoffs that you need to lay off a second, or even third group, in order to remain in business. Don’t do this. It’s best to cut deep, but cut once. Rolling layoffs are a disaster in any team, as everyone who can get another job will leave—they perceive clearly that their days at this company are numbered and the axe could fall at any time.

You’ll want to decide how you’ll lay people off. A principle of “first in, first out,” where the most recently hired people are laid off, can be less emotionally taxing to the team, as they’re not losing team members they’ve worked with for a long time. In these cases, layoffs can also be approached as a case of excessive or over-hiring, rather than direct existential business threat. In a remote team, keeping the remaining team members engaged is more difficult, so optimizing for the less emotionally draining layoff structure is even more beneficial.

An exception is when laying off a large percentage of staff. In this case, keeping only the top performing employees, and appealing to a sense of elitism, of being “chosen to save the business,” might be enough to galvanize the remaining team into action. “Us against the world” can be a powerfully motivating narrative.

You can adapt a lot of the same communication plan for dismissing one person for larger layoffs. Essentially, your goal will be to minimize rumors and panics and avoid post-layoff quitting and disengagement. Transparency and communicating genuine remorse for the pain of both those laid off and those who’ve said goodbye to colleagues, go a long way.

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story”When Buffer did layoffs, we published a blog post from the CEO about what had gone wrong, how we’d reached that point, and what our plan was to recover. Our CEO met with each teammate individually (feasible at that current team size) to assure them and answer questions. In this case, the reliance was on good will: that the company can turn around, that the leadership did everything possible to prevent a layoff, that the layoffs were done as fairly as possible. While our employee NPS dipped 10 points, it remained highly favorable, and we didn’t have a single post-layoff resignation in the following year.” —Katie Wilde, VP of Engineering, Buffer

Holding a Town Hall (Public Q&A)

Directly after layoffs have been delivered, a company all-hands meeting with a live Q&A can help to create stabilization by:

  • Allowing questions to be submitted anonymously ahead of time

  • Sharing the anonymous questions before the all-hands meeting and allowing up-voting

  • Addressing the most voted-for questions live in the Q&A

  • Allowing time for live questions and follow-ons to be asked

  • Following up by answering every question in writing for the record and so that nothing is missed.

contributeWe’re looking for more examples or stories from remote companies that have gone through significant reorgs or layoffs. If you have any to contribute, please let us know!

Revoking Access

Operationally, it’s more complicated to remove access from a set of remote tools than to remove a building fob or pass. To make sure you’re able to remove access to tools and virtual workspaces when someone leaves, it’s best to keep up-to-date records of who has what level of access to which tools. In many startups in particular, new tools are adopted and old ones dropped every month, so this needs to be regularly maintained.

Wherever possible, you can benefit from using single sign-on methods, such as Okta or Auth0. This allows you to remove access to most tools at once. To prevent some difficulty in the event of a dismissal or departure, you may wish to consider early on whether or not a team member needs access to the tool. It’s always good practice to grant the lowest necessary level of access. For example, one would not give out “administrator” access when a lower level of access will do. It’s much easier to grant or change access when it becomes needed, than to reverse the damage done by a disgruntled ex-employee who has administrator access to the key tool. These best practices are even more important in a distributed team, where you need to be able to quickly lock down access to a tangled web of online tools and portals, and this is hard to do in a hurry if you’re disorganized or under-prepared.

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