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What Does an Ethical Mass Layoff Look Like?

Helping your employees find a new job is a start. Oh, and severance pay.

In the stupidly unfortunate series of events known as 2020, COVID and automation joined forces to form a diabolical tag team, double drop-kicking the working class and generating waves of mass layoffs

The layoffs have become rampant enough for employers, in what feels like a first under capitalism, to publicly express sympathy for workers they have to let go. Online, managers are swapping advice for ways to soften the blow. Some are offering referrals. Some are polishing resumes. Some are providing severance packages, which is what we all really want.

But in a workforce where layoffs are inevitable and a universal basic income remains a pipe dream, how can we take care of our workers while we bid them farewell? Are referrals and resume parties really the answer? Until we can prevent layoffs — which are usually impulsive on the part of companies, anyway — and provide a stronger safety net for the unemployed, anything at all helps.

This begins on the managerial level: Managers should show basic empathy and compassion, understand the unique frustrations of having to be let go over Zoom during a pandemic, and be transparent about why layoffs are happening, how much money the company has and what they can offer in regards to helping along the way. 

Employers even benefit from taking this benevolent approach to layoffs, since consumers are becoming more and more attuned to how companies treat their employees. As David Mayer, a professor in the management and organizations area at the Ross School of Business at the University of Michigan, recently explained to my colleague Andrew Fiouzi, “This is an issue where doing the right thing and doing what’s best for the organization are in alignment. Organizations that show care for their terminated employees not only help them feel seen, but it also serves as a signal for future and current employees that the organization cares about its people.”

As already mentioned, while some companies have utterly failed their employees during the pandemic, many have stepped up to the plate. “I’ve seen executives bend over backwards to make personal calls to their networks to help laid-off staff find jobs,” says Alisa Cohn, named the #1 startup coach in the world at the 2019 Thinkers50 Marshall Goldsmith Coaching Awards. “I’ve also seen founders who got acquired fight tremendously to maintain all or most of their employees’ jobs. In the case of layoffs, I’ve seen executives keep people on as long as possible to extend their health insurance. Contrary to some of the memes of Silicon Valley, in my experience, founders and other executives really care about their employees and try hard to treat them with dignity.” (This is, of course, true in some cases more than others.)

Cohn also notes that, in acts of online vigilantism, some managers and executives have taken it upon themselves to help crowd-source job openings in their areas or networks. Many are also creating spreadsheets to provide referrals for employees who they were forced to let go. Both of these options are a whole lot more free than extending health insurance and providing severance pay, so even employers who are struggling themselves due to the pandemic can still help employees they had to let go.

And once again, for any employers reading this, taking these extra steps to take care of your employees will help you and your company, too. “I tell all the leaders I work with that treating your employees with dignity and supporting them strongly and publicly by helping them get new jobs is enlightened self-interest,” Cohn says. “You should announce how you’re trying to help, and say specifically that your employees should all stay in touch — don’t treat them like lepers. When you do this, you signal strong values to the people who are staying. They’re watching what might happen to them one day. When you offer the employees you have to part ways with respect and compassion, the employees who stay will be much more able to pull together, heal and continue to build the company.”

Take that, COVID and automation.