For multiple Seattle-area startups, 2022 has been a challenging year.
With rising interest rates, rapid inflation and market downturns, multiple Seattle-area companies have faced layoffs in recent months. Esper, Flyhomes and Qumulo, among others, have all reduced their headcounts this summer.
Layoffs can be brutal decisions for any company. Affected employees are often left with mental, emotional and financial hardship. So what's the best way for employers to proceed with necessary cutbacks?
The Business Journal reached out to Seattle-area leaders within the tech ecosystem for best practices. (Editor's note: These email responses have been edited for length and clarity.)
Shannon Anderson, director of talent at Madrona Venture Group
"Create a public Google doc that your impacted employees can opt-in to list their name, title, location preference, URL. Include the name of their manager and an endorsement about the impact each person made. Don't say 'great person,' but specify how your customers, company or team are better because of this person’s contribution. The manager can also post this endorsement directly on the employee's LinkedIn page."
Isaac Kato, managing director of Techstars Seattle
"Be human, be a grown-up, and take ownership of the layoff process. Be as generous as you can with severance and aid for the departing. Take the meetings face-to-face and take ownership of your role in the need for layoffs. Be transparent about why the layoffs are a necessity and how the decision was made. ... Per conventional wisdom, one deep cut is far better than a string of shallow cuts. You can recover from one layoff, but a series of layoffs will ultimately destroy your credibility and the team's trust in you."
Krista Ahlgrim, leader of the HR and people ops practice at Denali Founder Consulting
"The CEO delivers the message in an all-hands meeting, and takes clear ownership of the decision. Managers follow up one-on-one with their direct reports, and HR/people ops works with everyone affected on severance, benefits and next steps. ... Commitment to your employees need not end on the last day of their employment. Do everything you can to help them find their next role."
Kirby Winfield, founding general partner of Ascend.vc
"Layoffs tend to impact the team that remains more than you'd think. Treating the laid off employees with care and respect goes a long way to boosting morale. ... Allow former employees to hold vested options without exercising for 12 months. Provide as much severance as you can afford. Conduct (ask-me-anything) sessions with remaining team to process loss. Offer career counseling to laid off employees. Offer to connect employees with portfolio companies of the funds on your cap table."
Heather Redman, co-founder and managing partner at Flying Fish Partners
"The first thing is to be sure that the company hasn’t come to this decision hastily and that you’ve done other prudent things to cut burn and that you can explain the other steps you’ve taken and the logic behind the decision to your people leaders and the team that remains. Founders should take no or reduced salary if they can see a rebound ahead for instance. ... Successive layoffs are very, very hard on culture and will kill a company by causing people to be fearful that they are next. So cut once and cut deep so you can demonstrate a clear path to success for the remaining team."
Leslie Feinzaig, founder and CEO of Graham & Walker
"Companies should cut once and cut deep, so as to ensure the remaining employees that they need not be afraid that they'll be next. All employees — the affected and the unaffected — will appreciate a concerted effort to help folks find a new role post layoffs. After the fact, managers at all levels should spend extra time connecting with their teams to ease the transition to the new normal, revisit priorities, and help everyone feel supported, heard and motivated."
Devin Miller, co-founder and CEO of SecureSave
"It really comes down to excellent communication and execution. Ideally the staff is not surprised and is well supported. Even better, be slow to hire and don’t grow too fast to start with."
