Saying Goodbye
In Life and Startups
Photo by James Yarema on Unsplash
When I first became an HR leader at my company, an early employee and good friend told me, “Holly, people remember beginnings and endings. Make sure the company says hello and goodbye well.”
COVID-19 has ravaged every part of our society, including many startups. It’s also no secret that the gaming industry is naturally riddled with expansions and contractions, causing cycles of hiring and downsizing. Over our 11 years, I am least proud of the number times we had to say goodbye to our colleagues. Several times our layoffs triggered WARN, a law that requires a company to give enough notice as well as notify government entities in cases of mass layoffs. [a] Most layoffs are caused by a miscalculation of forecasts in revenue to cover the costs. No one could have forecasted a pandemic’s impact on revenue, but you can control your response. Costs are 100% in your control. While the solution is tough, it can be done, and in many cases the organization can come out stronger as a result. If you are in the tough position of having to say goodbye to employees, this is written with you in mind.
Only a few moments define the company culture. This is one of them. How you say goodbye, no matter how hard it is, will have indelible repercussions on the organization. Everything you do is watched not just by those leaving, but more importantly those left behind. And, while you are being watched, it’s not about you.
We had 80 employees as of September 2010, 150 by April of 2011 and 450 employees across 3 new offices by the end of 2011. And, we had to do our first RIF. I quickly learned a RIF was a Reduction in Force. Such sterilized language to describe a tough process full of emotions and logistics that you need to get right. This was mostly a one-way door decision that had difficult consequences. We had failed, and now our employees had to pay for it.
The principles we adopted for layoffs were:
Business strategy dictates the new org which dictate positions eliminated
Make the hard decisions now and cut once
Find homes for people in the new org, if not we have to say goodbye
Be as generous as possible in severance, coverage and career placement
Double down on those staying
Communicate with care
Like most industries, our industry is small, but the opportunities were big. People devote their livelihood to the craft of making games, so it made sense that when they crossed paths with our company both our lives were changed, and thus our view on talent became: Kabam Talent for Life
Making the List
A Reduction in Force (RIF) is an elimination of positions. This means that the position is no longer needed, and should not be done for performance reasons. So you really should look at which positions will no longer be needed in the new strategy of your company - the “new org.” At the highest level, the strategy and direction of the new org should dictate which groups and positions are affected. Finance, HR and Legal should be involved from the very beginning as there are many things they need to prepare and will need to execute the entire process.
The strategy dictates the financial plan. The financial plan drives how big the list is. Usually it’s trying to reduce a percentage cost. The CFO or Finance is a reporting function and can help come up with that number, but it’s up to the CEO and/or the execs (depending on how big the org and cuts need to be) to decide whether to peanut butter the eliminations or go deep in one area. Our philosophy was that it’s easier and more effective to cut groups and initiatives rather than to peanut butter the cuts. There are some rare times that peanut butter works and that’s usually when the organization is smaller (fewer than 100 employees).
Second, decide who is IN at the highest levels. [b] You will need these people to help you execute the “new org” going forward. This means you have to give some thought in planning not just to your new strategy but what org structure could look like. If you are a larger org that has clear roles and managers, then one principle in org design is to think about boxes first and then people. This means that you think about the role first to execute your strategy in the “new org” and then you put the people in the role.
These people will also help you execute the layoffs. Usually included are folks on your leadership team and/or department heads. If the person who needs to help you execute layoffs is someone who is affected by the layoffs (this is due to an entire department going away), then you should talk to them first on their employment status before having them execute the layoffs.
We had to do a big re-org not only due to costs, but it was also clear that our org structure did not work for our financial plan. We were set to try to produce many games quickly; however, we were set up to have a centralized matrixed organization with a head for every function: Art, Technology, Product, etc. In order for the organization to move faster, our “new org” would be decentralized so that functional departments, such as art and product, would report to a General Manager (GM) or Game Lead (GL) in charge of the game. This way the game teams could be independent functioning units that moved faster. This was also a model that made the most sense for multi-game studios. [c] This meant in the “new org” we would not have a home for senior centralized managers such as Heads of Technology or Art. We tried to find homes for many of them. Some even went on to be GMs, but for those where their skill sets and professional aspirations were not a match, we had to say goodbye. We had a conversation about their employment status, so they could be fully involved and own many of the decisions they would need to make. Simultaneously we worked on being as generous as possible on severance so they did not need to worry about what would happen afterwards. Since most were professional, they understood and were not only respectful but remained friends of the company and their colleagues afterwards.
Checking it Twice
Depending on your leadership style as the CEO, you should review the list, but be careful about overriding your execs and managers. [d] Most managers would rather be forced to get to a number than forced to which people will be on their team.
While you care about people going out the door, you want to double down on those staying behind. That is why it’s so important to empower the leaders in the “new org” to make decisions. These leaders are building the future of the company and you want to make sure they are motivated. In the past, we put together a simple retention bonus program but, I would caution you to think carefully about how you structure it and really question whether you are incenting people to stay for the right reasons. The most important takeaway is that saying goodbye is not only impacting the future of those leaving, but also the future of those staying. And as a company, you double down on those that are are staying.
Everyone is valued
While there are multiple names on a list and you are creating a process, it can feel like you want to rip off the band-aid in one fell swoop. However, for each person on the other end it is their entire world right now. It’s not about the process. It’s not about legal. It’s not about you. It’s about them.
Be as generous as possible in severance, coverage and in other ways. HR, Finance and the CEO should be in conversation about what is in the budget to provide for people. We defaulted to giving severance regardless of tenure and started from there. Amounts changed based on tenure and seniority. You can be creative but at the same time depending on how big the list is, make sure it applies to all. The more senior folks will negotiate for a unique package. [e] The company will try to put the best package forward given tenure and seniority.
Each employee leaving should not only have a personalized package that explains everything, but also a one-on-one conversation to go through their package and any questions. If the group being laid off is small, then you can have one-on-one conversations with the manager and HR. The manager breaks the news and HR is there for support to walk through paperwork. It’s best if the manager can keep it brief and leave after the news is broken. Sometimes the group is so big, it’s an announcement to those affected. Still everyone should have a one-on-one meeting to go through the details afterward.
In a WFH world, there are certain things you do not need or cannot provide, like tissue, but you can still offer care and individualized attention. Here is a great article about doing layoffs remotely in a COVID-19 world. In addition, a psychologist friend of mine gave a great tip in invoking care via video, which is to enable more wait time for the video lag as well as verbalize what you would do in person. So for example, if you think the person is getting emotional, you can recognize it by saying “If we were face to face, I would give you a tissue, do you have one around?”
Just Tell Me Already
HOW you communicate impacts how the receiver feels. So it’s pretty important to ensure the order of communications respects that. HR begins to set the timeline on the process, and involves managers, Finance, Legal, IT, Facilities and at times Security.
The first rule of thumb is someone should never find out about their employment status outside of their manager or department head. Therefore, what usually happens is simultaneous communications. First those that are leaving need to be notified first, then those that are not on the list need to be told usually by their leader or department head. Then usually it ends with an all-hands meeting that day. Sometimes in rare cases, the all hands meeting happens first and people nervously wait for their virtual “tap on the shoulder” or “mysterious meeting” to appear.
One of the things we wanted to do was offer an opportunity for colleagues to say goodbye and thank those who are leaving the organization. We would have a goodbye lunch and by that time the CEO would send out a company-wide email about the layoffs after everyone had been notified. Sadly it became a tradition for us to offer that. We also offered outplacement services, and brought in third-party career counselors. Our recruiters would help alumni find positions. At times other companies would hold career fairs. If you are in an industry that is small like gaming this happens.
In a WFH world, you can offer a #goodbye channel where people can say goodbye and exchange contact info to stay in touch. More importantly, set up an alumni group either on Facebook, Slack or elsewhere so you can help one another. [d] You can also offer remote outplacement services or set up a virtual career fair for other companies that can hire your employees. With permission from the affected employee, you can also put their name on the layoff list so that external recruiters can contact them. Our internal recruiters would send these to their recruiting network and friends at other companies. Also feel free to put your name here, as the larger your network the more opportunities you can find.
Remember…
People will forget what you said.
People will forget what you did.
But people will never forget how you made them feel.
- Maya Angelou
Saying goodbye is a rare chance for you to write a good ending for an employee’s time at your company, as well as set up your company culture for success in the future. Make sure to do it with respect and care. If you do that, they will never forget, when you cross paths again.
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