2023 is behind us, but the waters in the IT industry are still wavy. January had quite a handful of announcements about reducing the workforce left and right. Truth be told, layoffs are probably one of those few could-be traumatic events for managers. Managers who fully invested themselves in the teams they need to reduce now. Everyone’s situation is certainly unique, but I’d like to share a few common principles on how to prepare and, at the end of the day, suffer less.

Objectives

Before going into the deep end, here is a reminder of the objectives of why organizations are doing layoffs. In most cases, it is:

1. Cost reduction. Across the board or in certain areas. Especially in the software industry, salaries are a significant portion of operational costs.
2. Restructuring. Eliminating redundancy, improving efficiency.
3. Change of strategy. Changes in the market, business goals, and growth projections require a change of strategy when the organizational structure has to adapt accordingly swiftly.

There might be many others, but keeping objectives in mind helps to make the most difficult decisions - who will be let go - a little bit less hectic.

That’s not enough, however. It’s necessary to sit down and think about the following angles as well.

Team Side

Business continuity is, of course, a hard requirement for any kind of change. Making sure you understand what’s going to be needed for the business going forward is the first step. With this information, one could start drawing a mental map:

• Who in the team holds critical knowledge and cannot be replaced? (bus factor=1)
• Who’s team’s enabler, the glue (loss of significantly more capacity than just this 1 person)
• What’s the minimum level of operational coverage? Who has a track record of excelling in this?

Only then it’s worth considering the first obvious factor of who could be included in The List: performance. Too often companies ignore the items mentioned above and cut off key people with lower hard performance metrics. But those metrics are lower for reasons of training, enabling, participating in incidents, or other important but difficult-to-track work.

A good question to ask yourself is the following: what X (a number) engineers in your team absolutely could NOT be lost for the team to keep performing?

Personal Side

Another angle to consider is about personalities. Here, one has to start by admitting that a fully objective call is impossible. However, if somebody has had problems fitting into the team for a while already, the upcoming wave of stress is not going to make it better, if you catch my drift.

With the upcoming changes to the team, consider what the new structure will look like. It’s almost the same as thinking about a new team: they have to get along well, have a good mix of positive thinking, people who are challenging others, enablers, etc.

If you went through a lot with this team before, you also know who has better resiliency and will be able to recover faster as well.

Again, a good question for a self-check: would I form such a team completely from scratch?

Preparations

Layoffs are such an emotionally charged event, so just do not expect cold faces and indifference. People might and will get emotional; therefore, prepare yourself and choose a time and space for venting very carefully. Deal with hot-tempered with extra attention. Nobody needs to get fired because they got frustrated a bit too much at the wrong time with the wrong people.

You need to have the following plan ready and agreed with your peers:

1. Communication plan, with exact timing and message. Who informs exactly when and what’s the information to be shared?
2. Communication plan for the AFTER it happens. Here, it can vary based on teams and needs. E.g., a 1-hour Q&A with the team 2 hours after layoffs happen.
3. Ready Q&A materials. Prepare answers to the questions you can come up with yourself. They will certainly be asked. It will make your life so much easier, and help to restore at least a little bit of trust when your folks see you a bit more confident.

It’s a great idea to share all of this with your own leadership and peers (for alignment), but also to make sure nothing you’re doing and communicating has some unforeseen negative legal implications.

Decompression

However resilient you feel you are, you need to take care of yourself afterward. Lean on your peers, and find a way to let at least some emotions out and vent out.

Executing layoffs can probably be the most difficult thing you must do in your career. At least it was for me. However, remember: it’s not the end of the world.

Photo by Paula Schmidt