In the shadow of the Twitter disaster: How to prep for layoffs

The way Twitter's new owner, Elon Musk, and his executive team have handled layoffs at the company is a case study in how not do it.

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Disclosure: Dell is a client of the author.

There is an increasing chance many of us will experience layoffs shortly — and last week’s Twitter job-cuts disaster is a rolling showcase of how not to do one.

Let’s look at the Twitter acquisition and layoff trainwreck and how you can assure the groups you’re in (or who report to you) remain viable in the face of job cuts or a corporate acquisition. 

The Twitter vs. Dell process

Dell has the best acquisition process on the planet. What makes it so good is this: Dell does a lot of due diligence and planning at the front end and accepts the related risk of having to sideline executives for up to a year if the acquisition doesn’t go through. This measures the risk of losing the productivity of a handful of people against losing the productivity of the entire acquired unit. So far, every Dell acquisition I’ve tracked has not only been successful, but the acquired company outperformed its previous status. (This last is very unusual; most acquisitions fail to meet expectations.)

The reason for Twitter’s recent failures is simple: new owner Elon Musk didn’t do any deep analysis before the acquisition, and then put speed ahead of quality on the critical path to execution. Dell can move as quickly as Musk, but by starting early to identify the critical assets it’s acquired — and then moving to protect them — its approach assures a quality outcome. Musk’s “process” clearly did not. His approach (and that of many others) is so focused on speed that much of the value of the acquired company is lost. 

The acquired company will likely have to downsize, but that needs to be done surgically, using a scalpel-like approach to cuts — not the meat axe Musk used. It’s foolish that tech companies, in particular, don’t take a data and analytics approach to acquisitions and downsizing, but most don’t. Dell’s approach is heavily analytics-based, and had it acquired Twitter, I’m convinced the social network would have not only remained viable, it would now be better off. 

Preparing for a layoff

Even when a layoff is done well, you need to be able to argue for your best people to assure that once the cuts are done, you’ve minimized collateral damage. This means you need to know not only who your top performers are but who is keeping your team(s) together and focused. You’ll need this information to choose who goes and who stays, and to have the ammunition you need to stop a termination that would cripple your group. 

Layoffs destroy company loyalty and team cohesion, so you also need to keep your people informed and help them make decisions out of crisis. If a layoff is likely, helping people more easily transition out of a company will pay dividends with those that remain; it will remove a great deal of concern about the end result and perhaps lower the number of people who leave later, even though they were not on the final termination list. 

You may also need retention packages for your most valuable employees, because headhunters will try to identify and recruit them for hard-to-fill positions when they get wind of coming layoffs. Your goal as a manager is to keep your team’s viability intact — even if management seems to have gone insane with its overall layoff approach (as appears to be the case at Twitter). 

This brings up another important point: Ask yourself whether you want to ride this out. If I were at Twitter, my answer would be no — but I’d still want to maintain ties to my people and assure they’re taken care of during this painful process. Be honest with your folks. If you’re leaving because you no longer see a future at the company, move as quickly as possible so the firm can replace you with someone more loyal and you don’t leave your employees feeling like you told them one thing (stay) and then did another. People have a tendency to swap roles in the business world, and some of those future subordinates might one day be critical to you finding another down the road. The better care you take of them, the better they’ll (hopefully) take care of you later. 

Planning, analytics, honesty

I personally think layoffs are stupid; they are difficult to do well, and they can destroy employee loyalty. But downsizing surgically, at least, can reduce the kinds of problems Twitter is seeing now. It’s already rushing to hire back folks laid off last week, employees that likely won’t last long because they no longer like or trust it. 

If you’ve been ordered to execute a layoff, you’ll end up in far better shape if you quickly decide whether you are going to stay and already have a data-based idea about which employees you can lose and which you need to keep. Finally, remember, that with a layoff, both you and your employees are in the same boat. This can become a bonding experience where teams work together to weather a coming storm rather than throwing each other under the layoff bus. The first can result in a stronger smaller team; the second will destroy the team(s) outright.   

On a personal note, I usually advise against working for companies that do layoffs because, having been through one, I know how painful they can be — even if, as was my case, you aren’t one of the people laid off. These events can be incredibly stressful and depressing. Recognize you aren’t alone and seek both to ensure your own mental health and that of your employees. 

Be thankful, too, that you don’t work for an Elon Musk company. (And if you do, maybe fix that while you still can.)

Copyright © 2022 IDG Communications, Inc.

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