Layoffs | Mental Health
Recession is here, With payroll being the most expensive item on a company's books, some organizations are considering hiring freezes or layoffs to stay afloat. In 2022, over 17,600 employees at Indian unicorns and other startups were laid off, a stark contrast to the funding and hiring frenzy in 2021.
In the current economy, we're seeing the "hire first, profit later" strategy backfire. Hiring is not a strategy for growth. Hiring comes after growth and profit, not the other way around.
“The people being laid off right now are 10-15th percentile of the Indian tax paying audience, these are really smart people. So what is the short-term approach toward layoffs? What are the indicators identifying how to make them do better at their jobs? How do you get them back to the market, helping them move past all the Imposter syndrome and identify crisis despite performing their best “ says Sameer Mohan, Product Marketing Manager at Fisdom.
It’s been a rollercoaster and the internet is going frenzy. People are anxious, and people are scared. While we could see all the anxiety-induced, sad tweets pouring in, Yash who worked in Public Policy at Twitter beamed with optimism.
Yash told us “I keep telling this to people, and maybe this is not the most healthy thing, but this is more than a job for me in the sense. I've been an employee for two years, but a user for 12~ literally half my life, I just am 25. So the platform means a lot to me, I do 100% of my reading via Twitter. I'm the first person in my family to go to college, to go to university and so, Twitter has served as a window to the world for me. I met some of my best friends and mentors there and received tons of learning. So my first reaction after being let go was okay, this has happened. Of course, I was upset, and I just went off to sleep. And I was woken up by non-stop calls from the media, friends, and family. And somehow this whole very innocuous post blew up. I have no idea why. People from the BBC, New York Times, and CNN called. Like, could we all realize that anything and everything was happening? It's been overwhelming but we shall move past it.”
Can you imagine your employer is going to tell you whether you still have a job or not at a specific time tomorrow, but you need to check your spam folder for it because it might just be there?
When news breaks, it usually comes in a flood. The organization is in a state of shock. Both those who retained and those who got fired feel betrayed and angry.
“You and me, we see this as statistics. But this is an actual person. The mental trauma is truly invisible. Okay, they move on and take another job, but for them, it will always be like, I can be laid off anytime now. Will this trauma help them present 100% of themselves in the next job? Are we even compensating them? What are we doing as a society for it? How are we making sure that all these people who have been let go because of crappy decisions are getting back on their feet?” says Sameer Mohan, Product Marketing Manager at Fisdom.
Organizations can help both the groups of people, the ones laid off and the ones retained, by providing the necessary professional help and support, communicating the duration for which the help will be available, particularly to those who have been laid off; holding authentic conversations facilitated by experts, colleagues, and professionals to allow people who have been laid off to express their feelings and process the change; and supporting them.
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This week we’re in conversation with Rahul Gonsalves, CEO Obvious.in, a Product consultancy firm. We talk about the recent layoffs and market sentiment.
Q. Let's start with how the recession has kicked in and payroll being the biggest expense on any books that we see. Layoffs are the first thing that people go on to. What are your thoughts around it?
What you’re seeing right now in the larger market is a result of firms overestimating the shift towards digital and making large investments towards it. This ultimately hasn't necessarily paid off. They placed their bets on aggressive growth and devoted huge investments towards that. Today, post to years of the pandemic, the results are not exactly what we expected. The payroll, marketing, etc. are most often the big components in the overall optics. Hence, these are the first areas to be affected during this kind of a situation.
Q. Do you think these layoffs are going to benefit in some way with leaner organizations working with better efficiency?
Employees perform different roles, skill sets, and even temperament. Hence, each of them work better with a specific group. The problem with leaner teams arises when organizations try to blend these groups, which gets ambiguous and sets people for absolutely different roles than what they are skilled at.
Every organization has a large, complex system and they try to impose these simplistic ways of working on this system. This can lead to plenty of bad decisions by the organizations that can have negative consequences. We’re shifting towards two modes very quickly ~ the last two years being the mode of rapid growth. While the current one is to be efficient and careful about the capital.
Q.We also see employees wanting organisations to translate what these layoff means to them. What is your take on that, how are you seeing this entire scenario?
The meaning of stability has changed over the years. Earlier, people preferred government jobs because of the environment at that stage where people preferred stability over anything; However, over the last five years, have been pretty different due to the amount of capital available and the low interest rates globally at a period of growth. For those employees, their experience includes a huge rise in the compensation and an infinite demand for a particular set of skills. But currently, we are still moving towards a very different direction.
Hence, it is advisable for people with only those five years of experience to look at it as an exception, not a norm. Even though it was a great phase for both the employees and the companies, I would caution people to be prepared for the fact that this particular situation may not exist in the next five years. Hence, you will have to make sure that:
Q. What does the most empathetic ideal layoff scenario look like according to you? How do you think we can make it better for people that are affected?
I think the most important thing to look at is countries like The US, which brings in employees from a lot of other countries. Hence, for them, it’s not about losing jobs, but it is also about losing the ability to stay at a particular place. Plenty of people have their families living in those countries as well.
For them, work is one part of their life, but there's a huge other part of their life that's now going to be affected by this. How to set them up with the best possible support? One option is to probably prioritize these employees over others who aren’t in a similar position.
Another area to focus on during mass layoffs is to set up support for helping people find their new opportunities and also recognizing that there may be a certain time period where they may not have opportunities. In this scenario, I have seen some of the best companies actually extending healthcare benefits. These are significant. expenses that can come up. Hence, for the stipulated time period, companies can consider the possibility of extending these benefits even after they’ve been let go.
These are obviously other areas like people with disabilities or new parents towards which some sort of support is required to ensure things go comparatively better for them.
The second part is really about how you communicate both to the people who've been laid off as well as to the people who are remaining. Both are equally important stakeholders in this decision.
Is there anyone taking responsibility for this who’d come up and clarify the reasons behind the layoffs? They need to create clarity around the fact that this is not specifically based on your performance, as plenty of internal questions can arise and people might assume that they were let go because of their actions. Hence, it is extremely important to be clear about the WHY of the entire situation.
And the final thing is to ensure doing this as quickly, objectively, and cleanly as possible. Stretching this might call for complications, create doubts of rumors, and make people wait in a restless manner.
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There's no such thing as a "nice" layoff. A person is asked to revamp their whole life, to start looking for a new job, worry about why it was them and not somebody else, feel unjustly treated, imposter syndrome kicks in and there is so much trauma involved. Most people who have been laid off never forget how it made them feel, never forget the day, the organization, and the boss, and may always hold a grudge. Whatever a company tries to do, it will never be enough, but at least we can try to do better.
Be empathetic - “Layoffs are definitely a business decision. But communication should be a human decision” Says Kriti Dugar who went ahead to rewrite Twitter’s layoff email.
You need to respect the person and let them go with dignity. Maya Angelou rightly said, “I have learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.”
Make most business data critical points- Lay out historical reasons and facts to identify and explain why the layoffs are happening, what went wrong, and where. Tell them how you fell short of targets, the predictions didn't go well, or whatever the business reason for it is. Be honest and transparent.
Take the blame- Don’t leave people thinking that it was their fault. Taking a more humane approach not only reduces survivor guilt, but also improves morale and productivity, and makes those let go feel cared for. Companies should explain why an employee is being let go in their termination notice, such as: due to slow business, department closures, mergers and acquisitions, COVID-19, and so on. Employers should offer to write a recommendation letter for employees.
Benefits and other help- A layoff means all security provided by a company is gone. You need to offer a hand of support with generous Severance pay (not just equal to a notice period, but extra and equivalent to give them a generous runway), Medical insurance minimum of 6 months, help with immigration and visa status, childcare and disability care, bonuses, accelerated vesting periods, etc.
Career help - The next 6-8 month job hunt cycle will be hard on people. Reach out to your network - founders, investors, alumni, and clients and create a database of openings.
Yash who got laid off from Twitter mentioned “A group of ex-tweeps (Twitter employees) has created groups to help. They are also writing referrals. There's a Google Sheet going around so the other recruiters can see who has been impacted and what roles they were in. It's just been very heartwarming. It's almost like one huge family in that sense that we got your back, and we'll figure this out. So you're not on your own and alone.”
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