Executive folk, how do you decide who gets laid off and who stays?

likehelpful
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You start with a talent 9box of everyone on your team. The two axes are performance and potential. High performers kick ass at the job, high potential is likely to move up to the next level.

Anyone who is not in the middle or right hand side of that diagram immediately comes under scrutiny.

Let’s say everyone on your team is great, you love them and you want to keep them. Then it gets trickier. More on this below.

Finance will do an analysis of something like “how many people can we keep employed until the end of the year if we only make this lay-off now.” And say “we need to cut 75 of our 800 people to make it to the end of the year with no more cuts.”

The first place people will look is non-billable. Agencies have only one product: the work and the people that make it. So overhead teams like Finance, Facilities, D&I, Culture, Education, etc. tend to get scrutinized first. That may not be enough though (maybe 20 of those 80).

From there the COO/CEO will start to make estimates for how each department has to make cuts.

From there I’ve had it done two ways:
1) When I managed my teams P&L I’ve gotten a number like “you need to cut 200k of your 1.2M budget” - then I could decide if two juniors at 80k were better to cut than one director or not. In these instances, salary certainly starts to come into play. If you add more expensive, you have a higher risk.

2) Most recently I was just given a number. So of the 60 people we laid off, my department had to contribute 3. In this instance you end up focusing on who is billable/non billable and the junior team members are most likely affected because you are focusing on output.

You will go back and forth on this “list” a lot. With HR, with the operations and account leads. You fight for people, for the dollar difference. It’s exhausting. We lay up at night for weeks worried about what it means for this person and that person. It will change last minute - someone may leave to get a new job rebalancing your entire plan.

It is never something that we want to do. It is something that we have to do. We’re not responsible for just one team member but the entire team and these layoffs end up happening in an effort to protect as many people as possible longer term.

likehelpfulsmart

@AC OP
For the instances in which I get headcount it is because I specifically don’t have optics into finances. This is the first time I haven’t had visibility into a P&L for my department and this is controlled mostly by Operations.

To me this tends to be a difference between mid size (100-350 people) to large (300+) people.

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Well, first the people at the top make a list of all the folks in their department who are not like them. Usually that’s women and POC - so take a good amount of those folks and put ‘em in the lay-off bowl. They then gently stir in anyone over 50 with care to remove any pieces of eggshell from the mix. Then they add a tiiiiiny dash of white guys who they never really vibed with and sprinkle them in for optical flavor. Add condolences and the term “really good people”, then serve from your iPhone.

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That may be how it is in organizations with a greater mandate to consider optics, but in my agency’s most recent laying off, C-Suite followed that formula to a T: had to let go of 12, 9 of whom were women, 7 of those were WOC, of the remaining 3, 2 were POCs and of the 12, 8 were over 45. But more obviously was a judicious carving out of those who were “not a great culture fit” which meant anyone who filed complaints or harassment charges, or people who were critical of management or processes. Of the survivors, five people failed up. Never let a good crisis go to waste.

likesmart

There’s always a place for talent and loyalty

funnylike

Which industry do you work in? It sounds lovely.

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In my experience the head of the department will come to the next level down and say “we need to get rid of at least four people, who should it be?” And then we’d negotiate and figure it out. Nowhere near scientific. Much closer to what ECD said though probably less politics and more friendliness. Like if they are talented and people enjoy having them around that’s number one with a bullet to keep your job.

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I look at the p&l and balance it in the way that hurts the team the least. Output is usually my primary factor, and if I feel I have to be under a bit to keep a better employee and shed some dead weight, I have that flexibility, at least in the short term.

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