I've recently had to lay off my team at a early-stage start-up. Here's how I handled it.
First, there were no surprises that morning. My rule in dealing with people is to be as honest as I'd like them to be with me. With staff, I expect them to raise issues when they arise or to let me know if they've encountered something they can't resolve. In exchange, they should expect me to keep them informed as events outside the group unfold. In the case of the start-up venture, there were many daily instances of uncertainty and volatility, and I would always be up-front about these things. In doing so, I tried to explain my thoughts on how we could roll with the punches and stay productive. The key in such uncertain environments is agility. And by agility I mean:
Some of the sources of volatility included: the departures of the venture's other VP's; two departures in my engineering team; and a series of major mid-project changes in the technology we were meant to be delivering. The uncertainty came in the investment in the firm, in the match between what we were building and the different segments of our market, and in whether we could meet the specifications before us. This was all made more challenging by the complexity of the system we were building and even by ambiguity of terms in a rapidly evolving market segment. Rolling with the punches was a daily task, and keeping the guys informed meant that they knew that our employment was uncertain.
Knowing the end was near, I called each of the fellows on the team the night before the expected decision. I explained that a layoff would likely be happening, and that I would offer each:
I asked each for their concerns or questions, and heard that they'd all prefer to keep working through the two week notice due to permanent employees. This would take us to the end of the software delivery "sprint", in which we were delivering some refinements on a product that was 98% complete.
That morning, the boss took my aside during a brief stop at the office before he headed to a conference. He told me of the board's decision to contract with an external party to carry on with product development once the funding was available. The call by the board came after the second of the two other VP's resigned–perhaps the decision was to not attempt to build an operating company but instead to develop a brand and marketing machine. The boss mused about when we might tell the staff. I told him that as I'd hired them and had been managing them, I'd take it on and would do so that morning. I told him that we would work through the then-current sprint.
With two of the members out of the office on the big day, I had to confirm the previous night's discussion via Slack, the messaging tool. Those in the office met so that I could relay the news and discuss what each of us now needed to happen. It came down to ensuring:
I communicated the above to the boss, and told the guys to work from home for the duration.
I set about at once writing to members of my network about the availability of three of the staff–the fourth had been part time and had plenty of work. I explained the situation as follows. If you should come across any opportunities for any of the following personnel please do reach out to them:
Linux/Networking engineer: Though still an intern, he built a fully functional remotely-installable CPE/server image in about 20 MB that builds two partitions on the target device: a live one and a standby that takes any upgrades destined for the host. His design features a read-only filesystem that prevents unlicensed endpoints from being created.
Full-stack developer: built the web-based "orchestrator" that allows our partners to manage their sites, using technologies such as react, node, and graphQL. The orchestrator allows the remote creation of multi-link aggregation to the site and things like fail-over between links. This developer has a strong sense of correct software design and of dealing with technical debt.
C programmer: Inside of two months, he took our core aggregation software from achieving about 65% of aggregate link throughput to 90%, above the industry benchmark of about 80%. In the process, he eliminated persistent issues with stability. He is one of the most thorough and hard-working developers I’ve ever worked with.
It was thanks to these three that the company has a product ready to launch. They accomplished everything on a shoestring budget under difficult conditions.
It's November 1 as I write this and I'm happy to report that as a result of my network introductions the full-stack developer has had several requests for a resume, and that the C programmer has one lined up today. No one's landed on their feet just yet, but it's only been three weeks.
I've confirmed that all of us received our outstanding paycheck and that the records of employment have been delivered to the government. Each had his letter of recommendation from me on our last day together. I'm still working with management on the stock option paperwork. While there's not a lot more than that I can do, I'll continue to pass along opportunities as they come up.
I've spent most of my career in tech startups, and have come to the conclusion that improved human capital is 90% of the story of any company. Not just in producing its outcomes and determining the long-term success of a venture–that should be obvious: if you tirelessly work to produce better outcomes for your people including mentoring, honesty, and career development, they will work tirelessly to transform your business. What I mean is that the outcomes for the people who make up the company is 90% of the value that a venture actually produces.
In an environment where businesses are designed solely to extract value from the economy for the financial benefit of a small number of shareholders, there's nothing in a business for anybody else: its clients, the society that houses it, or the people it employs. I believe it's up to us to make something more with what we can: to produce people with better skills and better contacts and a better ability to make their way in the world; but also to produce people who face each day with meaning. As Studs Terkel, a 20th Century broadcaster, once said:
Work is about a daily search for meaning as well as daily bread; for recognition as well as cash; for astonishment rather than torpor; in short for a sort of life, rather than a Monday-to-Friday sort of dying.
I would suggest that this extends to society as a whole: what is the citizenry here for, as a source of cheap labor fighting for underpaid jobs for the benefit of people they don't know, or .. to be citizens who grow and develop?
So I'll continue to do what I can for my former team in the short term, and to work with future teams in a similar fashion.
©2019-2021 michael werneburg. firstname.lastname@example.org