Layoffs: A Guide to Doing It Right

Organizations grow and change – it’s inevitable.

Layoffs are often the route businesses take to decrease costs, improve margins, and restructure for a better future.

And if you’re in a situation where a lay-off is a possibility – ie. downsizing or firing a number of people at the same time – we’ve put together a guide to ask yourself the questions to help guide if a lay-off is the right option.


Two questions to ask yourself:


1. Is this a short-term band-aid solution to a larger long-term problem?

2. Can you restructure any roles rather than eliminating them?


If after answering these questions, a layoff is still the only viable option, it’s now your job to get it right.


Know the cons behind a layoff.


A hit to employee performance and morale.

A smaller capacity to perform the work.

Increased chances of bankruptcy.

These are a few of the risks to consider before going ahead with a layoff.

Your innovation may also see an impact. A study from a Fortune 500 tech firm showed that after the firm eliminated 15% of their staff, the innovative products they developed declined by 24%!


Layoffs done differently.


After some online digging, we found two companies who took a different approach to layoffs and eventually saw a positive result.


1. The company: Nokia

The restructure: Poor performance for their mobile phone in 2011 led to a potential layoff of 18,000 employees.

The plan: Providing options.


Rather than the usual, “We’re sorry there’s been a restructure and your role is no longer needed. Here’s a severance package and thank you for your work” blanket statement, Nokia came up with a program to give the 18,000 employees different options to consider after being laid off:


1. Apply to another job at Nokia.


2. Get support finding a job outside of Nokia – career coaching, resume reviews, etc.


3. Come up with your own business plan and submit a proposal to Nokia to potentially get a grant.


4. Get financial support accomplishing a personal goal.


If you’re thinking this sounds like a costly program after already performing a costly layoff, well, it’s the opposite. Nokia conducted a poorly-done layoff back in 2008 and this new program was only 4% of the cost of the original layoff.


Takeaway: Creative payouts and support can be less costly and more meaningful for the employees impacted.


2. The company: AT&T

The restructure: In 2013, the business saw that 100,000 of 240,000 employees were in jobs that were going to be eliminated in the future.

The plan: Retraining.


The easy route would’ve been to let all 100,000 go. What AT&T did instead was create a program to retrain employees by 2020.

As the program has developed over time, newly trained employees are being brought on to the tech roles that replaced their previous positions. Early on, 18 months after the program was launched, the product development cycle at AT&T decreased by 40% and the time to revenue increased by 30%.


Takeaway: Plan for the future and train your people to be ready for THOSE roles.



The moral of the story is that you have the option to create a layoff that aligns with your company’s mission and values. How you execute and the options you provide to your employees make a difference in their experience as well as your business’ future performance.


Do you need help talking through or executing your organizational restructure? We’re all ears! Reach out and set up a call with #teamcorker.


Meet Matt. He is bold. He is always up for the adventure. He is your biggest fan.

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