Responding to mass redundancies: how to downsize ethically
The recent wave of redundancies, particularly in US-headquartered tech employers, has highlighted a new trend: faceless firing. In November, Twitter employees discovered their fate via email and, back in March, employees of P&O Ferries watched their redundancy announcement via video.
In times of global uncertainty, redundancies are, of course, more likely. But an ethical and equitable approach to letting staff go is possible and it makes good business sense.
It is vital to remember that you’re dealing with people, not stats. Any large restructure should be approached with a good dose of empathy and a clear plan of action. Here are six ways to apply an ethical framework to any downsizing or redundancy process.
Avoid faceless firing
Mass redundancies can make bespoke one-to-one communication difficult. Yet, when Airbnb had to let go of a quarter of its staff in 2020, co-founder and CEO Brian Chesky’s email to employees was a lesson in the power of providing clarity and detail.
While text messages and phone notifications can be an effective way to interact with consumers, it is never an appropriate way to communicate a redundancy or change in career status. ‘Faceless firing’ is not only inhumane, it’s bad business and can do significant damage to an organisation’s employer brand.
Own your mistakes
Transparency is key, both for those individuals impacted and the people left in the wider business, particularly in the case of large-scale rightsizing. There will be sensitivities and processes that need to be followed, but where possible, sharing information with teams not impacted will ultimately allow them to operate with empathy and understanding towards colleagues that have been affected.
Owning your mistakes is important too. CEO of Stripe, Patrick Collison showed humility and honesty in his announcement, identifying that he had over-hired and allowed costs to creep up. It avoids fuelling the rumour mill and gives people clarity on what’s happening and why. The result is greater stability among remaining teams. If employees think their job is in danger, they’re more likely to become a flight risk themselves – meaning businesses will lose out on even more great talent.
Fairness is the most critical element of ethical downsizing – if employees feel that executives have been transparent, fair and honest, and have explained how redundancies became unavoidable, then they are less likely to be critical of the downsizing process. Analysing employee responses to redundancies at Stripe versus at Twitter highlights the importance of this.
Provide solid manager training
Terminating someone’s contract of employment is a conversation that even the most experienced managers will find difficult to navigate. Telling team members they may have worked with for years that they’ve lost their job is undeniably hard, especially when they’ve forged strong relationships. HR’s role in preparing managers for these conversations is imperative to ensure they feel confident in their approach and, ultimately, are empowered to act with empathy and clarity.
Offer proactive support
Setting up talent communities for staff impacted by job losses is a trend that emerged in 2020, due to the volume of pandemic-induced redundancies. These communities allow growing organisations to hire skilled, recently redundant staff, minimising the length and impact of their unemployment. This approach is more important now than ever due to the cost-of-living crisis. And it’s a scalable way to support impacted staff and limit long-term damage to your employer brand.
Avoiding bias is, of course, key when bringing in new talent, but it’s equally important when downsizing. Redundancies should not impact one community more than another. Women, and Black and Latinx women in particular, were disproportionately impacted by redundancies during the global pandemic. With a financial recession on the horizon, we need to ensure this doesn’t happen again – particularly in male-dominated, predominantly white industries like tech, from which women of colour are already often excluded. Employers should work with their diversity & inclusion leaders to ensure ‘downsizing bias’ is avoided.
Improve the offboarding process
How we treat people on the way out of an organisation is just as important as how we treat them when they arrive. Offboarding needs to be given the same consideration as onboarding, as how departing colleagues are treated will have an impact on the morale and culture of those left behind. People want to work for an organisation where everyone is treated fairly and with respect and dignity.
In the future, we might want to re-engage individuals or even someone within their network. Burning bridges on the way out closes the door to boomerang employees. If not done right, making people redundant can impact our bottom line and our ability to attract talent in the future.