Why Twitter is a cautionary tale for companies eyeing layoffs
Few things in the recent history of corporate America have been as clumsy or have invited as much scorn as Twitter’s nuclear-scale layoffs under new owner Elon Musk.
Since the social media platform discharged around half of its roughly 7,500 global employees this month, the stream of negative headlines has been more like a gusher:
“‘Weak, Pathetic and Cruel’: HR Managers Weigh In on Elon Musk’s Mass Twitter Layoffs”
“Exodus of Twitter Executives as Musk’s Chaotic Reign Continues”
“Twitter Worker Laid Off While 6 Months Pregnant”
One journalist observed that in executing the layoffs, Musk gave a “master class” in how not to let go of employees.
Layoffs are never easy, and companies have a long history of bungling them. Even in the best-managed circumstances, taking away people’s livelihoods, particularly as the holiday season approaches, isn’t exactly a good look. But in a post-Covid-19 environment, where employees have revolted against harsh management practices and corporations are particularly keen on being seen as good places to work, the issue of downsizing is an especially sensitive one — something that was clearly lost on a certain billionaire.
Compare the reaction around Twitter’s layoffs to that of Facebook parent Meta, which let go of 13% of its workforce, or more than 11,000 employees.
When Meta boss Mark Zuckerberg announced his company’s cuts, he “very clearly outlines what happened,” said Eric Mochnacz, senior consultant at New Jersey-based Red Clover, an HR services firm. “He said, ‘I’m owning the outcome,'” said Mochnacz. “He clearly outlines it was his responsibility to fix and, unfortunately, this is where they’ve landed as a company. He clearly outlines what each person is entitled to and really takes into consideration all the different factors … so he recognizes the impact.”
“Layoffs are often necessary for the continued survival of an organization, albeit a very difficult decision for both employers and employees,” said Katherine Kirkinis, founder and CEO of Wanderlust Careers, a career services firm in New York. But while every company handles downsizing as it sees fit, there are a few best practices organizations would be wise to employ, she proposed, including thoughtful decision making around who should be laid off, respectful warnings and offers of severance pay and extended health insurance benefits.
Things don’t always go so smoothly, observed Rikki Goldenberg, a New York-based career and leadership coach formerly with McKinsey & Co. “Mass staff reductions get messy, fast,” she said. “Mistakes are going to happen. The bigger the layoff, the more mistakes. Because at the end of the day, people turn into numbers, not human beings with families, mortgages, holiday travel coming up, you name it.”
Seeing as these are real people whose lives have been turned upside down, however, doing layoffs the right way is not an option, Goldenberg suggested. The process calls for an abundance of empathy, and as such, employees should be told precisely which factors led to their jobs being eliminated and which other cost-saving alternatives were explored — among them, temporary pay cuts and shelved bonuses for company executives — before management settled on the “last resort,” as Goldberg sees it.
Robert Kelley, professor of management at Carnegie Mellon University’s Tepper School of Business in Pittsburgh, said companies should view separation events as “a future investment in people, not primarily a cost drain,” suggesting that employers think of those being laid off as “alumni whom you might want to rehire in the future when the company is on better footing. Granted, many might not want to come back, but you want them to leave saying that they were treated well in the process.”
While most employees appreciate that layoffs are a reality of the working world, what they won’t accept is “being depersonalized and treated like commodities instead of as a valued person,” Kelley proposed. “You don’t want them badmouthing you to future employees and future customers.”
Beyond the treatment of those being laid off, existing employees must also be considered, said Red Clover’s Mochnacz. Not reassuring the remaining team members “causes fear, discomfort, uneasiness, and you’re going to probably have people who start looking for a new job,” he said. “All these companies pride themselves on their culture and ‘We’re a great place to work.’ You don’t want your current employees feeling like the axe is going to drop any minute.”
In a perfect world, layoffs should be seamless, drama-free and as respectful as possible. As Goldenberg put it, “no surprise email lockouts and computer shutdowns.”
That is in blunt contrast to the way Twitter handled things.
While the company’s layoffs officially came down Friday, Nov. 4, many employees began tweeting Thursday night that they had been locked out of their corporate email accounts. As a corporation and as a culture, the social network was transformed in a flash, culminating in Musk sidelining the remote work policy instituted during the pandemic and ordering all team members back to the office at once — in an email (Musk’s very first to employees) that was sent out at 2:30 a.m. Adding to the chaos, some employees were asked to come back days after being dismissed.
Twitter is hardly alone when it comes to companies botching layoffs. For instance, last June, Coinbase offloaded around 1,100 employees, who discovered the news when they couldn’t access their email. In a company blog post, CEO Brian Armstrong explained that employees have access to “sensitive customer information” and he couldn’t risk any affected employee making a “rash decision.”
For an already anxious workforce, ham-fisted layoffs do not instill much confidence.
In a survey this past June — months before the layoffs at Twitter, Meta, Lyft and all across Silicon Valley — only 9% of tech workers said they felt secure in their jobs, compared to 80% who expressed confidence in the job market back in March. This year, more than 100,000 tech employees in the U.S. alone have lost their jobs, with more than 20,000 firings this month alone.
Red Clover’s Mochnacz acknowledges the “weird shift” in the labor market, where just a few months ago tech workers “were fielding four or five job offers and just negotiating out the wazoo to get the best offer, and companies were just throwing money at people.”
While the market has cooled and layoffs dominate headlines, that doesn’t mean the tech job environment is a desert. Mochnacz hopes workers understand at the end of the day that downsizing because of financial realities “just happens” and “their skills are going to be useful elsewhere.”