Layoffs or restructuring, whatever you want to call it, is a last resort move for small and medium companies. Unlike companies with 500 or more employees and multinationals, employees in SMBs quickly feel the restructuring’s effect because the organization is already small. It can also impede
ability to bounce back production once demand rises again.
During the recession of 2008, Tony Hsieh, CEO of online shoe and clothing shop Zappos.com was forced to lay off 135 employees—about 8% of the company’s workforce. He wasn’t the only CEO doing it, but how he handled the situation set him and Zappos apart from other companies.
So What Made Zappos’ Layoff Special?
Most companies, especially the giants with a big turf to protect, keep things hush-hush during a layoff. They embargo the news as long as they can, sometimes employees only find out on the day itself. Some companies even go as far as forbidding employees to talk about what happened.
Threats of losing severance pay—not a government mandated benefit, by the way—when caught ranting on social media aren’t unheard of.
With Zappos, however, Hsieh was very transparent with everyone—his stakeholders, employees and the general public. He blogged and tweeted about the whole ordeal
, explaining why it was needed and what Zappos was doing to help displaced employees.
More surprising, he allowed employees to talk about their feelings on social media. His only instruction was, ‘use your own judgment.’
You may not agree with Hsieh’s actions, but there’s no denying he handled the layoff quite well.
Here are several ways you can handle a company restructuring without further damaging your company’s reputation.
4 Tips to Conduct a Better Layoff that Won’t Ruin Your Chances of a Comeback
1. Have a Third-Party Conduct the Exit Interview
Displaced employees can provide valuable feedback to improve operations. But they might not be too keen to share this with an insider—even someone from HR.
Hire a third-party to conduct the exit interview. Talking to an outsider will give displaced employees a chance to vent their frustrations, which can clue you in on broken processes in your organization.
2. Train Employees Left Behind
Obviously, those left behind will have to shoulder the work of those who left, unless you’re eliminating an entire service or product line.