The ability to lay off employees is a key skill for a manager and entrepreneur. It took me a long time to learn this.
Often, managers are afraid of it. They fear it due to guilt, the desire to 'be good', the reluctance to face conflict, and the unpreparedness to make decisions without delay. As a result, they harm everyone: the company, the team, the shareholders, and even the very employees they 'pity'.
Layoffs are not evil. They are a managerial decision. And reduced expenses are the same as earned money.
When I had a small agency, eTeam, I didn't lay anyone off. I waited. I waited until a third of the company became ineffective—not because the people were bad, but because there was no product or project where they were truly needed. I hoped it would 'resolve itself'.
It didn't resolve. Later, when I was merging two departments at RBC, I simply delegated the task of dealing with the applicability of some people to my subordinates. In fact, those who were needed were still gradually reduced, just later.
I learned an excellent lesson early on. At 25, I was unexpectedly appointed to lead a hundred people at RBC Soft. On the very first day, my supervisor, Oleg Savtsov, gave me the task: to fire the PR manager. She was not suitable and was not coping. I was very tense.
For three days, I circled around, gathering my courage, and eventually, with the most guilty look, I announced the dismissal. This taught me to act, but the unpleasant feelings lingered for a long time. It took me about ten years to reach a 'working condition'.
At the 'peak of my career', a colleague and I were consulting an owner in an IT company and laid off 100 people in one day. Clearly, quickly, without harming the remaining processes. Simply because it was right for the business.
Over time, I understood simple things. You should always lay off if:
- you think 'I should probably fire them' (right in 90% of cases);
- the person is toxic: doesn't believe, is sad, winds themselves and others up;
- you don't understand what they do—and neither does the team;
- the budget doesn't add up—cut to profitability without thinking, even if everyone says 'the product will fail' (spoiler: it won't);
- they are expensive 'old-timers' who have lost their spark and continue to 'find themselves' for years.
And the most important point, which almost no one talks about: you need to be ready to fire yourself when the time comes. I myself delayed this for 2 years at Grape.
How to lay off so that the business doesn't fall apart? You need to negotiate and 'sell' the changes with the remaining managers and help them 'sell it further'. You can't just 'cross out lines'—the system must remain connected and motivated. For critical functions—if necessary, negotiate part-time or a transition period in advance, coming up with economical solutions. If a manager has a team, don't play the executioner yourself.
You say: 'We need to lay off half.'
First, hysteria.
Then—rationality.
In the end, managers themselves know perfectly well who to lay off, and almost always immediately suggest cutting a third.
There is an empirical rule—it's better to cut very deeply but once, than weakly and several times (I regularly make mistakes). One reduction is 2 weeks of emotions, and in 2-4 weeks no one will remember (the remaining ones—because they are 'chosen to stay', well, the prospects are better). If you cut a second time—the memory and frustration will remain much longer.
In general, if you want to be a CEO—work like a CEO, not like a 'good person'.