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Managing Layoffs / Furloughs during COVID-19

While there are no right or wrong answers to the ‘layoffs’ debate, is there a method to this madness?

Is there a way to manage layoffs/furloughs with mitigated impact and least disruption?

Managing Layoffs / Furloughs during COVID-19

COVID-19 has hit businesses in an unprecedented way. The small and medium businesses are the worst hit and, employees are the biggest casualties. A debate endlessly raging on since the lockdown came into play has been around the legitimacy and ethics of layoffs.

As the Founder of UClean, which is still very much a startup, I have also been forced to make some tough decisions which include both furloughs as well as salary cuts. While there are no right or wrong answers to the ‘layoffs’ debate, is there a method to this madness? Is there a way to manage these layoffs/furloughs so that the impact can be dampened, and the bad blood avoided? No amount of watching George Clooney’s “Up in the air” would help.

At UClean, we have experimented with a few things. And we have iterated every time we had to layoff or LWP (Leave Without Pay). It is a little early to say what worked and what didn’t. But I will leave it to your judgment because I believe, the final outcome would be greatly influenced by the so-called company culture. Here are my few cents on planning and managing these layoffs/furloughs in the least disruptive way possible.

  • Bad news travels like wildfire; good news travels slow. So said Johnny Cash. Truer words have never been spoken. If the company is going through difficult times, make sure you share it with your team and encourage them to discuss it openly. You will be pleasantly surprised by the number of solutions you will receive from them
  • As the owner of the company, there is always this huge psychological pressure to be overly positive. Don’t give into this temptation. Face your demons and openly talk about them
  • Categorize your business verticals into “Absolutely Essential” and “Not So Essential” buckets. For E.g. Corporate Alliance team (B2B team) might be the least essential vertical in a company where 90% of business is retail (B2C). This should go first
  • Within the “Absolutely Essential” bucket, determine the ones which are overstaffed. Does your customer response center really need that number of people if the business is not even 50% of pre-Covid?
  • Hire only when absolutely necessary! Does the business need more marketing capability to build customer confidence and crawl back to the pre-COVID stage? Maybe add people to the marketing team
  • Wherever possible, the news of furlough/layoff should be done in person (or 1-on-1 video call if social distancing is a concern). Wherever possible, the Founder/Owner/CXO should be a part of this
  • These are very tough times. Every single penny matters. Once you have taken a decision to let go, make sure you communicate the same to the employee at the earliest
  • Be absolutely transparent in your communication. The layoff is not a reflection on their performance but the sign of tough times
  • In case you are putting an employee on indefinite furlough, be upfront about the fact that you do not know when this furlough will end
  • Do not perform the vanishing act after relaying the decision. Be available for any follow-up conversations and lend a patient ear

In the end, it is very important to understand and appreciate that you as a Founder/CXO is not to be blamed for this fiasco. COVID-19 has impacted the biggest of corporates and many have resorted to layoffs and furloughs. Don’t beat yourself up about it.

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