During my 14 years in corporate America, I saw my share of layoffs. Those experiences were extremely stressful. The actual layoffs were usually preceded by lots of rumors and speculation, the layoffs themselves were sad and disheartening, and the aftermath was a culture in need of rebuilding. This was true of every company I worked for from the late 1990s to the early 2010s.
I don’t remember many examples of leaders vulnerably sharing how hard those times were, how painstakingly the decisions were made, or how the remaining teams could have hope moving forward.
Today we have some different examples to follow…and thank goodness for that.
When Hard Times Hit
On November 3, Stripe – a global fintech company with 8,000 employees – announced it was laying off 14% of its workforce. At a time when the economy is showing signs of recession, over 1,000 Stripe employees found out they were going to be out of work.
The leadership team, led by co-founder and CEO, Patrick Collison, communicated the news via a company-wide letter. In stark contrast to the “memo” sent out by Elon Musk about layoffs to his newly acquired Twitter workforce, Collison issued a heartfelt explanation detailing how Stripe was going to handle the difficult situation.
You can read the full letter here.
A Blueprint for Layoffs
While there is no “right” way to handle layoffs, I believe Collison and his team set an example other companies can follow. Here are the things I really admire about how Stripe handled this:
- Timing of communication: The letter was sent out 15 minutes before employees were going to be notified if they were impacted. Instead of having employees to wait and worry, this was clear and direct.
- Tone of communication: Collison’s letter was apologetic, respectful, and honoring of the contributions made by the entire team, including those being laid off. It’s obvious from the tone this was an extremely hard decision.
- Ownership: Collison outlined and took responsibility for decisions he and John, his brother and co-founder, made that contributed to the layoffs.
- Proactive 1-1 meetings: Stripe employees were informed they would receive calendar invites for 1-1 meetings from managers over the next day. This gave each individual an opportunity to ask questions, have a live conversation, and be personally acknowledged.
- Alumni network: Stripe is creating an alumni.stripe.com email address for everyone affected in order to help people stay connected and let potential future employers know this candidate was a valuable member of a successful business.
- Robust, thoughtful severance packages: In addition to 14 weeks of severance pay designed to carry people through the holidays, Stripe announced they are paying out bonuses, cashing out unused PTO, providing the cash equivalent of 6 months of healthcare premiums or continuation, accelerating RSU vesting, and providing career and immigration support.
- Acknowledgment of imperfect times: Collison also wrote, “For those not affected, there’ll be some bumpiness over the next few days as we navigate a lot of change at once. We ask that you help us do right by Stripe’s users and the departing Stripes.” The remaining team members were essentially asked to be compassionate and patient through the transition.
- Inspiration for the future: Stripe is a $7B+ business that isn’t going to shut its door anytime soon, but the letter included some details about the business moving forward and changes being made to further sure up the company’s future.
Finishing Well
Collison ended his letter with this:
“Today is a sad day for everyone as we say goodbye to a number of talented colleagues. But we’re ready for a pitched effort ahead, and we’re putting Stripe on the right footing to face it.
For the rest of this week, we’ll focus on helping the people who are leaving Stripe. Next week we’ll reset, recalibrate, and move forward.”
While you may not be able to offer the exact same severance or support as Stripe, you can follow the general principle exemplified here: do right by your people, past, present, and future.
Kudos to Patrick and John Collison and well wishes to all the Stripe employees affected.