For about 2 years in the late 1980s, I worked for a start-up. It was based out of Toronto, and the CEO decided to expand to the New York metro area with a focus on New Jersey. I was 27 years old, and along with my two staff members (no older than me), we found office space and hired 5 people.
We were given a ton of autonomy – way too much.
Just after the five people had given notice to their employers, our CEO had a change of heart. It could have been financial – I honestly don’t know. I was instructed to get out of the office lease, and then I was told to lay off the five people who had not started yet – the ones who had just given notice.
It was horrifying. I had nothing I could say to them other than “I’m so sorry,” as the rationale for the layoffs was a complete mystery to me.
I swore to myself that if I were ever in a position where I had to make the difficult decision to lay folks off, there would be no mystery. There would be as much transparency as possible, and before even making a list, I would articulate the principles that were going to guide my decisions.
I was under no illusion that this would make people any less upset or angry, but I promised myself that my feet would be firmly planted on the high road.
I know many of you had the difficult task of laying folks off in 2025, and I really do want things to be very different this year. And yet, I believe it would be naive to be unprepared.
I have worked with numerous clients who have traveled down this road over the years, and I offer them something of a layoff philosophy – one that they can edit based on their own situation, their own values, and the organization’s values.
If you are unable to develop a set of principles, share them, and make tough decisions based on them, you don’t stand a chance of securing buy-in of any sort to offset the tumult that layoffs can create.
At the end of the process, what do you want the remaining staff to say? And what will the reasonable people who are laid off think/say (some will be livid, and there will be nothing to be done to appease them)
I am thinking that you are going for something like:
“Well, that felt awful, but it had to be done – we needed to reduce our expenses. Our E.D. was transparent about how they approached the task, and decisions seemed rooted in our values. I’m also glad we’re continuing to push to raise money, so we don’t keep shrinking. Lastly, I am not being given more to do for the same amount of money – it’s so demoralizing to hear “we’re going to have to do more with less.” I’m already feeling pretty maxed out.”
So if that is where we want to end, how do you get there?
Here are a few of what I consider to be some key guiding principles to consider with two big caveats. Please seek professional HR counsel on your plan and be as generous as you are able.
All Departments / All Levels
Layoffs can go off the rails if they are not equitable. Two of the biggest pitfalls:
- Not making any moves at the senior level
- Making no cuts to any programs but to development, communications, finance, and IT.
In the first instance, you might as well put a sign up at the office that says “people with the most power are untouchable.” In the second instance, you run the risk of sending a message about what functions matter and which don’t.
No Sacred Cows
Staff see right through this one. A favorite employee or someone who has been on staff forever is passed over because, well, the conversation is just too hard. Then you have ‘sacred cows’ who are in a position you don’t really need anymore. It’s time to make the hard calls. But come on, these kinds of calls are all hard!
No, I’m Not Asking You To Do More With Less
I have heard staff leaders say this and expect staff to just be ok with that. They won’t be, and they shouldn’t be. If you have to make substantial layoffs, you are going to have yet another hard decision – a program that you may need to cut or cut back. The morale of your remaining staff is essential to sustaining and rebuilding when you are able.
Layoffs Are a Strategy for Managing Out Low Performers
You have to be careful here; the position must be eliminated, or a job description recrafted for which the current staffer is not qualified (this is where an HR person can be vital).
Compensate and Promote
A layoff can actually be an opportunity to give your stars more opportunities to grow in new areas. If you are going to combine or add functions to an existing terrific staff member, make a big deal about it and compensate them. You will still save money because it is only one person, the person will be excited about the growth opportunity, and the staff will see a star be acknowledged.
Communicate Clearly and Discretely with All Stakeholders and Build Confidence
With guiding principles such as the ones I have outlined, you are on the right track. Now you need talking points for all stakeholders (staff, board, and donors) that demonstrate how thoughtful and strategic you have been in order to maintain the confidence (and in some cases, increase it) that folks have in your leadership. Be sure that the talking points include thoughts you have regarding any new fundraising strategies or new areas of focus so that all stakeholders see that you are looking at all sides of the P&L.
What you say and how quickly you say it can really be a game-changer in how what you do is received and interpreted. And it can make all the difference in reinforcing your skills as a leader.
You can never go wrong ending a blog post with a quote from Dr. Martin Luther King, Jr.
“The ultimate measure of a man is not where he stands in the moments of comfort, but where he stands at times of challenge and controversy.”
