How to Do a Layoff Well: The Parts That Feel Cold Are the Kind Ones

The first time I laid people off, I sat in my office in the dark for an hour afterward.

I was the CEO of CDNOW. We had about 525 employees, and our new parent company wanted the losses cut. We were losing a lot of money, and the quickest way to change that was to stop doing low-value things we’d been doing. That meant two rounds of layoffs: eighty-five people in the first, seventy in the second.

I’d fired people for performance before. A layoff is a different experience.

When you fire someone for performance, you generally feel justified. You’ve had the conversations. You’ve given them chances to improve. With a layoff, some of the people losing their jobs have done everything you asked of them. They’re good employees doing work the company can no longer support. That feels like your failure, not theirs.

I’d never done anything like it, so when our VP of HR suggested bringing in consultants who specialized in downsizing, I agreed. Everyone worked in person, so every conversation had to happen in person. The consultants helped us prepare the conversations, coordinate the logistics, and make sure everyone knew exactly what to do.

It went according to plan. I’d even say it went well, given what we were doing.

It was still gutting.

Leaders want to make an awful experience less awful. Sometimes their instincts about how to do that work against them.

I’ve written about when a layoff is the right call. This is about what happens once you’ve made it. Almost everything that makes a layoff humane feels cold while you’re doing it.

I’ll get to what I did when the hour was up.

The Conversation Is an Announcement

One of the hardest things for a manager to accept is that a layoff meeting isn’t a discussion about whether someone keeps their job or even why it’s happening. The decision has already been made.

The meeting is short and one-on-one. The news comes from the person’s closest manager, unless that manager is also being laid off. HR is in the room. The manager says a few clear sentences, then HR walks the person through the paperwork and next steps.

Short doesn’t mean robotic. The person will react, and they deserve to be heard, hence having the third person in the room. They don’t need a manager talking for fifteen minutes because the silence is uncomfortable. The decision is made, the kind thing is to say so plainly.

Remote works the same way, by Zoom. It’s harder. People keep flexible schedules, so you have to catch them while they’re working, trying not to put a meeting on the calendar in advance, especially with HR invited. Everyone will know.

Fast Is Kind. Careless Isn’t.

Once people have been notified, move quickly. At CDNOW, that meant ending employment immediately, cutting access, and walking people out rather than leaving them at their desks for the rest of the day.

A lot of people think that’s cruel. I understand the objection. These are people who may have spent years helping build the company. They want to say goodbye and collect their things. Those concerns deserve thought in how you design the process.

I still think a prompt, coordinated exit is the most humane way to do it. Leaving someone in limbo after telling them their job is gone doesn’t help them, and the rest of the company needs to start healing. Gossip starts right away. The sooner it’s done, the less time rumors have to spread.

There are security considerations too. Access should be cut at the moment the news is delivered, not before and not long after.

That’s why coordination matters more than anything else. Fast is not the same as rushed.

I learned that at a smaller company. We’d planned the individual conversations, the timing of the announcements, and when IT would turn off access. Then we fell behind schedule. One employee was still waiting for his meeting when IT disabled his account. He worked in customer service. He knew immediately what was happening, and he told everyone he’d lost access.

He wasn’t wrong. That was on us. We’d built a process designed to give people the news personally and let the technology deliver it first.

People should hear the news from a person before they hear it from their computer.

What You Owe the People Leaving

A layoff usually comes with a package. That’s one of the big differences from a performance termination.

One to two weeks of severance per year of service is a good benchmark. Smaller and younger companies tend to be frugal. Local law can change the math entirely: one client laid off a team in Europe, where the law required six months for everyone.

We offer severance partly because we feel accountable. We also offer it in exchange for a separation agreement with a general release of claims. Let’s not pretend that isn’t part of the calculation. People sue when they think a termination was unfair, which is why an objective selection process matters for layoffs.

In my case, we paid for outplacement for everyone affected. Not just executives, who are usually the only ones who get it. Everyone. That meant career coaching, résumé help, and support finding the next job. These people had helped build the company. The fact that we could no longer employ them didn’t erase that.

Have the benefits information and unemployment insurance access ready. Know how references will be handled. Don’t make someone who just lost their job wait while HR hunts for an answer you should have had before the meeting.

The People Who Stay Are the Real Audience

This is the part leaders underestimate most. Even more important than doing a layoff fairly and humanely is what you do for the people staying.

You spend weeks preparing, and then the last meeting ends and you’re exhausted. The employees who are staying are just getting started. They’ve spent the day watching coworkers and friends disappear. Some are wondering whether they’re next.

They’re watching. In a study of 146 companies that cut staff, employees’ confidence in leadership fell by 10.5 points afterward, and engagement often took a year or longer to recover.

So be ready. Have your FAQs. Have your speech. Have your acknowledgement of how awful this is. A widely shared playbook for founders recommends the same sequence: finish the individual conversations, send a prepared note from the CEO, then hold an all-hands that day or early the next morning so people can hear it directly and ask questions.

I probably still have my speech somewhere. As I remember it, I started by telling people they’d heard from friends that day that they were no longer with the company, and that I was sorry they wouldn’t get to work together anymore.

I wanted to acknowledge what had happened before I asked anyone to think about what came next. A lot of us were friends. People were upset. I was upset too.

A lot of leaders skip the acknowledgment and jump straight to the future: how lean and focused the company will be, how exciting the opportunities are. Maybe all of that’s true. Nobody’s ready to hear it. You have to build rapport first. Let them know you feel the same way they do.

Don’t Promise What You Don’t Know

Then they’ll ask the question they always ask. Are there going to be more layoffs?

You can’t say no, because you don’t know. You can’t say yes, because everyone will spend the next year waiting for the other shoe to drop.

What we said was, “There are none planned at this time.”

It doesn’t feel authentic. It is. If I’d told them there was a good chance of more because we still weren’t operating efficiently, they would have worked afraid, worked less efficiently, and made the problem worse.

The answer does have to be true. If you’ve already decided another round is coming, you can’t pretend otherwise just because the truth will make people nervous. You have to be honest. You don’t have to be completely vulnerable.

They didn’t fully believe me. Anyone paying attention read between the lines. It still gave them something to stand on.

Feel It, Then Decide

Work is transactional. We pay a salary. You do the work. When the work changes, someone has to renegotiate the terms.

We’re also employing humans. You’ll have to sit across from people who did nothing wrong and tell them they don’t work there anymore. You’re going to feel bad about that. I hope you do.

Feeling bad doesn’t mean you made the wrong decision, and not doing layoffs may be the wrong answer. It’s okay to feel accountable. It’s okay to feel remorseful. Blame is something else. Maybe you didn’t see the changes coming. Maybe you hoped they wouldn’t come. You still have to say: we got here, and I own it.

Then don’t let the feeling make the decision.

“The market’s soft. I should double everyone’s severance.” That might not be the right financial decision for the people who are staying. If you make bad financial decisions because you feel bad, you put other jobs at risk.

Be authentic. Be fair. Be clear.

I didn’t want to walk out and make my feelings everybody else’s problem. They had enough to deal with. I had to deal with my own emotions before I could deal with anyone else’s.

The short meeting, the fast exit, the closed door: the cold parts were for them.

The hour in the dark was for me.

When it was up, I went out and talked to the people who stayed.