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Planning and Managing Layoffs

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Planning and Managing Layoffs

A16Z,

5 min read
3 take-aways
Audio & text

What's inside?

A detailed playbook for possibly the hardest thing a leader has to do: laying off blameless employees to stay afloat in times of crisis.

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Editorial Rating

8

Qualities

  • Applicable
  • Insider's Take

Recommendation

David Ulevitch doesn’t purport to be a lawyer or an HR expert, but as a serial start-up entrepreneur, he has suffered the disappointment of having to lay off faultless employees. In this detailed playbook for managing layoffs, Ulevitch empathizes with firms that must let people go in order to survive and with leaders tagged to deliver the bad news. Rightly though, he reserves most of his compassion for affected employees; especially those let go in a time of crisis and few available jobs. 

Summary

You’ve exhausted all other options and must lay off your employees; prepare for one of the most difficult days of your career.

Having to let people go who’ve done good work is hard. Remember though, your disappointment pales in comparison with that of those affected. Laid-off employees face psychological and financial challenges heightened by COVID-19 and an extremely challenging environment in which to find new work.

Make the transition as caring as possible for affected employees while protecting your firm. 

To ease employees’ pain and safeguard your firm’s legal, ethical and reputational interests apply the following practices:

  • First, consider alternatives – Can you avoid a layoff by furloughing employees instead? This saves you their salary but gives them benefits, a huge relief for most workers. Also consider pay cuts instead of layoffs, but tread carefully: Usually, pay cuts fail to ...

About the Author

David Ulevitch is a general partner at Andreessen Horowitz, where he focuses on enterprise and SaaS investments. He is the founder and former CEO of enterprise security company OpenDNS (which Cisco acquired) and founder of EveryDNS, an authoritative domain name service.

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