Cassandra M. Bailey is the CEO of Slice Communications. She co-authored two books on marketing communications: "Pay Attention: How to Get, Keep and Use Attention to Grow Your Business" and "Social Media is About People." Views are the author's own.
The past three years have been a master class in dealing with financial contingencies for the corporate CFO. Layoffs entail some of the most difficult decision making because they don’t just involve the success of the business, but the lives and livelihoods of other human beings.
How you as CFO communicate these significant changes is important, because it will guide the rationale and the tone the company uses to share the message both internally and externally.
We’ve recently had multiple examples of how layoffs have been handled poorly. Google notified laid off employees via their personal email, but those who hadn’t checked their personal accounts instead showed up for work, assuming they still had jobs.
In a similar situation at Twitter, employees who hadn’t checked emails didn’t realize they were laid off until they found they were locked out of company computers. To make matters worse, the Twitter email originated from a third-party provider, which to many recipients looked like a phishing attempt.
A quick review of these and other significant layoffs this year can be a master class in how not to handle layoffs. But it doesn’t have to be this way. Here are six steps that CFOs contemplating staff cuts can take to ease the inherent pain of the process:
Step 1: Build a communications plan early
Have a reduction in force messaging plan in place ahead of time. But when is the best time to put such a plan together? The answer is always right now. Even if your company is currently experiencing success, building your plan now allows you to plan for tone, tactics and to establish what audiences – both inside and outside the company – should you need to share negative news.
Step 2: Deciding who and how
A layoff decision doesn’t happen in a vacuum, and as CFO, you’re often the person bringing to the table the hard numbers justifying such a move. So, in coming to the final decision, all members of the C-suite should be involved both in formulating the message and taking ownership of it, and all members of the board should understand why and how it’s happening. After that, work your way down the org chart until you reach the employees who will deliver the news to those affected. For the announcement itself, laid off employees should ideally hear the news from someone to whom they directly report (either in person or via video chat), with a company-wide message from the CEO coming after everyone has been notified. Timing is contingent upon the size of a company – international corporations need to consider the time zones in which they operate and perhaps plan progressive layoff notifications over a 12- or 24-hour period.
Step 3: Understand that layoffs affect the company and people
The CFO’s approach to the decision to recommend a reduction in force can make a tremendous difference in how that layoff announcement is received. Showing empathy, understanding and genuine concern for the welfare of those being affected is always the best first step. Tone is always important here, and a layoff announcement should never be framed as “not personal, just business.” A layoff is an intensely personal event for those affected and recognizing it as such will help convey that the layoff decision was a difficult one.
Step 4: Address compensation
An employee’s first question upon receiving a layoff announcement is, “What about me and my family?” Answer these questions as quickly and clearly as possible – whether the company will provide severance packages, to whom and based on what criteria; details on continued insurance coverage; job counseling and search resources; when the layoffs will take effect and any other details that will answer important questions up front.
Step 5: Stay transparent
Employees who receive a layoff notification are dealing with a specific type of surprise and – yes, trauma. Your internal team should not carry on as if nothing has happened. All employees – laid off and remaining – deserve to know why this decision is being made. Explain the specific reason your company is reducing its workforce – is the company closing facilities because they are no longer profitable? Are there geopolitical or other economic realities at play?
Include any steps you’ve already taken to avoid having to make layoffs. Did executives agree to a pay cut? Were long-term employees offered buyout packages? And remember, your employees should never be made to feel that a layoff is somehow their fault. The ultimate decisions on a company’s success lie with you and your peers in the C suite. Take responsibility.
Step 6: Make yourself available
Your marketing or internal communications department will need you as a resource to craft the message that will ultimately be shared with the public. They will need your help with the economic details behind the layoffs, as well as how those realities affected your company. Depending on the size of your company, you might also be called upon to speak on the company’s behalf to reporters. Work with your company’s communications team to craft talking points and focus on staying on topic while answering questions truthfully.
Of course, the hope is that your company’s goals, whether that’s increased profitability or growth, can come to pass without the need for layoffs. But by following the six steps outlined here, if that unfortunate situation does arise, you and your company will be better prepared to share a clear, empathetic and transparent message with team members and beyond.