The Compassionate Layoff Playbook

Layoffs happen. How do you carry one out gracefully?

Unfortunately, Matt Mochary has a lot of experience. He founded Totality in 1999 and laid off staff after the Dotcom crash. He managed to weather the storm and the firm was later acquired by MCI in 2005.

Now, he’s a CEO coach to the entrepreneurs behind Coinbase, Bolt, and Opendoor.

Here’s how to execute an effective layoff without destroying morale or performance;

1. Cut Once

Do not do a small cut when your company is burning cash. Measure twice and cut deep once and you’ll avoid the morale destruction of multiple consecutive layoffs.

2. Deliver The Message Correctly

Don’t communicate a mass layoff via email. If your company is large, share the responsibility with managers and require brief 1-on-1s with each person being laid off.

Line up brief back to back meetings through the morning with the folks being let go, then schedule an all hands meeting with those that will remain for the afternoon. Answer all questions simply and empathetically.

The people being let go should be treated with respect for the sake of their dignity and the company’s culture.

3. Expect a Performance Jump

Most companies see productivity improve after a layoff. The median contributor’s talent has risen when you trim your team down and the severity of the situation focuses attention.

Hopefully, you can manage cash flow and avoid major layoffs. But if you need to do it, this blueprint should help.

If you want more strategies, Matt has open-sourced all of his insights here.

The Daily Entrepreneur newsletter delivers brief meditations on the principles & practices of the world's greatest business builders. This newsletter will always remain free and dedicated to helping you get a little better each day.