Then came the mass Zoom call. Carvana detained more than one to notify workers of the layoffs.
“It was just, like, ‘You’re fired. Here is your severance package. Good day,” Tracy told Protocol. “There has to be a bit more of a human element, to make it seem like they feel bad about it. »
A spokesperson for Carvana told Protocol earlier this week that the company had “as many conversations as possible in person” and that less than half of the 2,500 layoffs were announced via Zoom. But Tracy still felt “awful” about being fired during a mass Zoom call, a sentiment a number of her colleagues echoed on Twitter.
Layoffs are always tough, and the era of remote and hybrid working poses even more challenges when workforce reductions are announced. As the market turns and more tech companies announce cuts, it’s worth considering whether the mass layoff of employees on Zoom — a tactic used by Better.com and TripActions before Carvana — is still acceptable.
Are Zoom layoffs acceptable?
TripActions made headlines in 2020 for its string of layoffs, though company spokeswoman Kelly Soderlund pointed out that those cuts came at the start of the pandemic, when offices were empty and layoffs at distance was uncharted territory.
“Essentially we were the first and we took the hit in the press about it, which is good,” Soderlund said. “But the layoffs we were forced to do in 2020 are very different from the layoffs that companies are making today. »
Now companies have more choice — and more precedent — when it comes to how they handle big cuts.
Betsy Leatherman, global president of Consulting Services for Leadership Circle, an executive coaching and assessment firm, said she would avoid Zoom’s mass layoffs at all costs. Instead, Leatherman said managers should tell employees directly.
“It would be an hour and a half or two hours of chaos,” Leatherman said. “But I bet you could do it. »
Even firing employees in groups of five or 10 is much better than saying tens or hundreds at a time, Leatherman said.
A former Better.com executive who spoke to Protocol on condition of anonymity agreed that mass layoffs from Zoom are never the right approach.
“It was barbaric. It was inhumane,” the former executive said of the layoffs at Better. “I’m told this in a mass video call and then all of a sudden it spreads like wildfire – I don’t think that’s the right way to do it. Better.com did not immediately respond to a request for comment.
But not everyone agrees that Zoom’s layoffs are necessarily a misstep.
Sandra Sucher, a Harvard Business School professor who wrote “The Power of Trust: How Companies Build It, Lose It, Gain It,” said it can be acceptable to announce a layoff in an e mass email or on a big Zoom call. This is an important opportunity for the CEO or other business leader to apologize for the layoff, explain why it’s happening, and take responsibility for the decisions that led to it.
When companies go this route, then employees should be able to speak directly with their managers, Sucher said.
“It gives people a chance to connect with who they know the most — even in a remote work environment — and hear the news on a personal basis,” Sucher said. “It also gives people the opportunity to ask questions. »
Carvana did none of that, according to Tracy.
“If I was able to talk to someone for at least 10 minutes, just to get some clarity,” Tracy said. “We weren’t even told why we were being laid off, really. It was a ‘restructure’, but that obviously means they hired too many people. »
Hiring conservatively was one of the lessons Khaled Hussein learned when he laid off nearly half of his employees at Tilt, the fintech company he sold to Airbnb in 2017. Tilt had been able to to raise cash easily — at one point reaching a valuation of $400 million — and its executives were “drinking the Kool-Aid” of hiring faster than the company was growing, Hussein said.
This type of overhiring is a common story of the past two years. Many businesses are finding that the huge growth spurt during the pandemic leaves them without much room to run.
When job cuts can’t be avoided, Hussein – now co-founder and CEO of recruitment start-up Betterleap – said it’s crucial for leaders to make themselves available to their employees.
“In times like these, every CEO wants to hide. It’s painful. And that’s when you have to do the complete opposite: you have to be very available,” Hussein said. You have to have the questions and answers, you have to be there, you have to answer all the questions. »
Open lines of communication when possible
In Carvana’s case, the Zoom chat feature was disabled and employees had no way to ask questions, Tracy said.
“We could have at least been open to questions at the end,” Tracy said. “I felt like it was very transactional. »
Even without an open Zoom chat, Carvana could have offered employees another way to submit questions, like a Google form, Hussein said. Blocking communication is “painful,” Hussein said.
“I emotionally understand what they want to do, that they want to avoid the pain,” Hussein said. “But the best way is just to go through it. »
People leaders are key to successfully managing these processes. The former Better.com executive said the company should have involved HR, or at least outside help, “in every aspect”. But the company didn’t have much of an HR team, the executive said.
How much notice?
Sucher recommends giving employees notice of the layoff rather than firing them on the spot. Some companies she has studied have given as much as six months or a year’s notice, but that’s in a particularly stable business environment, she said.
Giving advance notice isn’t common, but Sucher calls it a “clearly best practice” in that it allows employees to prepare.
“The idea that you owe people notice is both humane, respectful and a responsible way to deal,” Sucher said.
Leatherman is more supportive of layoffs in place. Finance-driven job cuts should happen as soon as possible, she said, while layoffs for other reasons — closing a product line or selling off part of the companies, for example – may deserve more notice, as they give employees time to move on to another group.
But in cases where employees are leaving the company, news of a layoff can hurt morale and demotivate employees, Leatherman said. Better .com performance has supposedly been hurt by the blow to morale its series of layoffs has caused. In these situations, it probably makes sense to cut ties early.
“Even really, really, hard-working, great, motivated employees can change,” Leatherman said. “You don’t want to taint the culture before they leave. »
What about severance pay?
Tracy receives four weeks of severance pay from Carvana, which she says was fair, although she worries about her co-workers supporting the families. She’s also worried about when she’ll get her severance pay, because Carvana won’t issue it until the employees return their gear. Tracy has yet to receive her shipping box, she said.
“They’re notorious for not sending out the boxes on time, so the money is going to be delayed for me,” Tracy said, noting that she had to delay her start date by a week because Carvana was late for send their equipment. “And financially, I kind of need that money now. »
Late or short severance packages can certainly put salt in the wound for workers affected by layoffs. A high-profile example took place at Better.com, where terminated employees accused the company of underpaying their severance package.
If financially feasible, Hussein recommended letting laid-off employees keep their computers, which can help them look for other jobs.
” Above all [in] low-paying jobs, that laptop would mean a lot more to that person than to the company as an asset,” Hussein said. “This brings us back to the underlying principle of compassion. »
This story was updated on May 13 to include a statement from TripActions and to clarify the circumstances of Carvana’s firings.