A decent layoff open letter

Original link: https://aaronnick.github.io/posts/a-decent-layoff-letter/

Recently, I have seen many companies laying off employees. The process of laying off employees is unpleasant and even inhumane. Previously, they raised their arms and shouted that they were comrades in arms and the company; It was the company that kicked the employees away.

It used to preach how humane the company was, but now it’s inhumane.

I am reminded of an article I read in 2020, when the world was facing a severe epidemic, companies were closing down, and unemployment numbers were rising. A company called Carta is also laying off staff, but when its boss made this difficult decision, he showed me what it means to be a humanized company – presenting the facts, stating the dilemma, understanding the position of shareholders and employees, In the process of public decision-making, the boss apologizes and takes responsibility, and gives decent and perfect compensation to the departing employees…


Original: Carta’s covid-19 layoff

Address: https://ift.tt/FyI0phU

Carta’s covid-19 layoffs

Today we announced 161 layoffs at Carta. Here’s what I announced to the company at the all-hands meeting this morning. I share it here in the hope that it will help other CEOs consider their layoff plans. If you are a CEO planning layoffs and would like assistance, please feel free to contact me.


Over the past few weeks, I’ve talked about the work we’re doing around recession planning. I’ve also said that layoffs are a possibility, but I’ve been delaying any decision around it as much as possible. Today, I can’t put it off any longer.

First of all, I want to apologize if my words sound emotionless, even like a machine. This is how I cope. I have written a manuscript and am working on it. I have a lot to say and I don’t want to forget anything. And I’m worried that I might not be able to do it all without something to fall back on.

fact

Let me get into the details first. Today, we are laying off 161 Carta employees, or 16% of our company. The layoffs are not uniform across the company, and different teams will be affected differently.

If you are one of those affected by the layoff, after this meeting you will receive an invitation to meet with your manager or Trifecta leadership. If you do not receive a meeting invitation by 10:30AM PT, you will not be affected. If you are contacted, you will meet with your informant and they will tell you the process of leaving.

moral conflict

A few weeks ago, I said at the town hall that there were two views when making the layoff decision. The first is the shareholder perspective, where cost reduction and cash conservation are paramount in a recession. The second is the employee perspective, and nothing is more important than saving jobs and helping employees as the world enters unemployment rates not seen since the Great Depression.

In both views, shareholders and employees have clear visions that are clear and morally correct, but at the same time diametrically opposed. That’s the CEO conundrum. The CEO sits between shareholders and employees, and they want to be able to do both at the same time.

Every CEO planning layoffs must resolve this ethical conflict. I choose to manage my conflicts by deciding who (and how many) should leave from a shareholder perspective, and how to help those who leave from an employee perspective.

How we decide how many people to lay off and who

Let me start with the shareholder perspective. Once we modeled slower growth rates in 2020, our first focus was on reducing non-personnel related expenses such as non-essential software, AWS, travel, real estate costs, and more. After we have taken out all the expenses that can be deducted from non-personnel expenses, we start to focus on personnel expenses.

Depending on how the economic slowdown affects different parts of the business, different teams are affected differently. Many customer-facing functions such as sales, marketing, onboarding, and support need to be reduced if we think we’re going to get fewer customers than we previously thought. As these departments shrink in size, many of the teams that support them, such as recruiting, HR, operations, and parts of R&D, must also shrink. Although analytics starts with the customer, it quickly begins to affect all parts of the organization. That makes sense. We exist only because our customers exist and allow us to serve them. And when our customers lose, we lose too.

After we figured out the headcount size of each department the business could support, we had to build a list of who in those departments should be part of the layoffs. My decision-making framework for department leaders is this.

  1. First, include those whose roles or job functions will be eliminated in the new growth forecast.
  2. Second, include those who are in the performance improvement plan, or are likely to be included in the performance improvement plan in the near future.
  3. Third, if the above two groups of people cannot reduce our budget enough, then do the exercise of “If we had to let one more person go, who would it be?” until the required number of people is reached.

Most people are in the first group. The second group had a few people, and the third group had even fewer.

Once the list is created, it is sent to me for approval. It is important that all of you know that I personally reviewed every list and everyone. If you’re one of those affected, it’s because I decided. Your manager did not make such a decision. For most of you, it’s the exact opposite. Your managers fought to keep you, and I reversed their decision. They are beyond reproach. If today is your last day, there is only one person to blame, and that is me.

what happens to those affected

For those who are leaving Carta today, we have revised our Next Chapter plans. And here we start from the employee’s point of view.

First, we will provide a maximum of 3 months of Next Chapter salary to all departing employees, regardless of the length of the tenure. There is a difference between finding a job in a normal economic environment and finding a job in this environment. People will need more time.

Second, we will pay for your COBRA health insurance until the end of the year. We are in the early stages of a global health crisis. Everyone needs health care. If you are able to enroll in your spouse’s health insurance, please do so. But if you don’t have this option, or our health insurance is better than your other options, go ahead and take COBRA and we’ll pay your premium until December 31st.

Third, if you joined us for less than a year, we will exclude you from the layoff list and extend your PTE to 1 year from today. You joined Carta to create it and to be a part of it. Everyone affected today will be an owner of Carta.

voluntary resignation

This one-time change to Next Chapter is more generous than our standard version. One of Next Chapter’s core principles is that termination compensation is the same and even, regardless of whether the termination is company-initiated or employee-initiated.

For this reason, we will be implementing a modified Next Chapter plan for employee voluntary departures by tomorrow. This means that if you want to leave Carta and let us know tomorrow morning, we will provide you with the same package that all affected employees received today. After tomorrow, the standard Next Chapter program will resume.

This is a difficult decision for me. My instinct is not to offer it. A more generous package would be to only offer employees who lost their jobs in the global crisis a job they want. But in the end we decided that it was the right thing to do in fulfilling our commitment to fairness and symmetry among our employees.

Today, we need to focus on dealing with all our involuntary separations. If you are not leaving today, but would like to leave tomorrow, please speak to your HRBP by 9am PT tomorrow morning and we will process your departure tomorrow.

It is sad to lose so many people today. I hope we don’t lose more people tomorrow.

Carta Alumni

One of my biggest regrets is that I didn’t build a Carta alumni network. My first job after college was at a company called Trilogy, which had a strong culture and a stronger alumni program. In fact, after Trilogy, I got three other jobs through Trilogy’s alumni network. I want to create the same network for us so that Carta alumni can find each other and work together again.

I’ve created a Slack channel and all of you will be invited today. In this channel, we will post Carta’s open positions that Carta alumni can apply for. I hope that as our business resumes, we will have the opportunity to re-hire many of you. I would also like ex-Carta employees from other companies to post jobs where they work. I want alumni to connect and start companies together that I can invest in. I also want everyone to stay connected.

I will be active in this channel, along with our team of people, to help all of you continue to do great things. For those of you who remember eShares 101, the greatest thing Carta will ever produce is you. This has never been more true.

what’s next

After we shut down this zoom, if you are affected, you will receive your exit meeting invitation this morning. After your meeting, we will begin closing access to various systems, but we will keep your slack account until the end of today. It is important that you are able to say goodbye to your friends and colleagues. And most importantly, they can say goodbye to you. To that end, we’ve created the #goodbye channel, where those affected can leave personal contact information and anything else you’d like to share.

For many of you, this is the last time I will speak to you at a company-wide all-hands meeting. I’ve thought a lot about what I hope my last words will be, and I’ve thought about how you all would feel. How will you remember today in weeks, months, or even years. I wondered if there was anything I could say to make your day easier. Also, do I have any parting wisdom or advice to offer.

After many restless nights, I realize I just want to say two things to all of you.

First of all, I am very sorry. I’m sorry we’re going through this as a company. As Carta employees, Americans and humanity in general, I regret what everyone is going through. This is a frightening and sad time. I remember how scared people were in 2000 and 2008. This one is even worse. I hope you all connect with your friends, family and those who support you. This is not a time to self-isolate, this is a time to seek help from others.

Second, I want to say thank you. I am honored to work with all of you. Thank you for being part of our company. Thank you for being a part of our lives. Thank you for coming to Carta. We will all be better for it.

See you on the Carta Alumni Network.

This article is reprinted from: https://aaronnick.github.io/posts/a-decent-layoff-letter/
This site is for inclusion only, and the copyright belongs to the original author.

Leave a Comment

Your email address will not be published.