Trust and Layoffs

I had the pleasure (and misfortune) of watching a company go through a roller coaster of financial instability. I joined the team at 70 people, and then watched as we went from 70 to 100, and then 100-30, and 30-10, and ultimately 10-0. The way that management fired its employees was deplorable.

A good company trusts its employees. This trust is a necessary component of a healthy successful company. How else can you expect your employees to hit deadlines, innovate, and self organize? As a manager, you must communicate a mission statement full of rules of thumb, and then trust your employees to follow through on it. Otherwise, you’ll spend all of your time micromanaging each decision, leaving yourself exhausted and your employees disenchanted. At this company in question, there was a large amount of trust (or so I thought), but it quickly disappeared, along with the bank account balance.

I remember walking into the office at my usual 830am. Half zombie, I dropped my bag at my desk and headed to grab a cup of coffee. A senior co-worker walked by me, and in passing said, “Was great working with you, Sam”. “You too.”, I managed to mumble, not realizing that would be the last time we chatted. I surveyed my surroundings. From across the room, I nervously watched our VP of Engineering impatiently stand over the poor man’s shoulder, waiting for him to grab his belongings and leave the building. It didn’t hit me at the time, but later I realized that on that morning, all trust had left the building. (I can’t fault the VP, he was just following orders, and later that day had to fire and escort himself from the premises).

For the 18 months prior, no VP stood over this man’s shoulder, as he, day after day, produced top quality honest work. Even though the company’s financial situation, had changed, this man’s moral integrity had not. That fateful day continued much the same, over three hours, 70 of the 100 people were tapped on the shoulder, and then monitored as they packed up and exited the room. The slimy process soiled everything. The personal relationships I had made with my peers quickly vanished. I assume many of them wondered why I was still kept on. (To this, I quip, “The founder’s name was Sam as well. So I’m sure they were moving quickly and didn’t look at last names as they placed my file in the ‘TO KEEP’ pile.”) Also, I know that many of the laid off workers would have loved spend an extra week or two, finishing up their work in the hope that it was useful in the future. All of these hopes were dashed during the immature layoffs.

The company pivoted and moved forward, though, staying in a scramble for funding. The remaining employees accepted that the days were numbered. So we all moved our minds elsewhere, most looked for future employment. The trust was gone, the motivation was dwindling, the company was screwed. Six months later, the company did the best they could, selling off some of the intellectual property, but ultimately slinking into bankruptcy.

Small companies should be smart and nimble, and, above all else, care about their employees. When you find the handful of people with whom you plan to entrust the company, you need to trust them and respect them. Not just when the weather is fair and the dollar bills are plentiful. Trust them with good news and with bad news. Unfortunately, this rarely happens. I still believe this kind of trust is possible with a small team, but with a big company, forget about it. We have an entire industry of business consultancies who get paid to fire employees. These employers know they have no mutual understanding with their employees, no trust.

In leiu of anything uplifting, the only salient advice is, ‘Look out for yourself, no one else is’.