Tough times bring out the best and worst in people and companies. Since the Covid-19 pandemic started, we’ve seen a noticeable increase in bad behavior. There’s been riots, cities set ablaze, looting of stores, killings and acts of police brutality.
On a lesser level, but still disconcerting, social media—as well as the mass media—has become a volatile cocktail of toxicity and hate. It’s not surprising that this lack of empathy and coldness has crept into the corporate world. The manner in which employees have been downsized tells a lot about the company and our overall current culture.
Last week, 24 Hour Fitness, a privately held national chain of about 430 gyms with 22,000 workers, fired employees via a phone call. According to The Wall Street Journal, the gym’s Chief human resources officer, Tami Majer, sent an email to workers asking them to participate in a phone call to discuss “important company updates,” indicating that they’ll be paid for their time. On the call, the employees were told that they’ve been let go. There wasn’t any in-depth discussion around severance packages, benefits or any other color provided as to what’s going on.
It’s understandable that 24 Hour Fitness had financial problems. Like thousands of other companies deemed non-essential, the gym chain was forced to close down its facilities. While many people say that gyms are indeed essential, as they’re important to our physical, mental and emotional health, it was viewed by medical professionals as a breeding ground for catching and spreading Covid-19 and couldn’t remain open.
For about four months, the company still had to pay rent, insurance and other expenses, while not receiving any revenue. Under these circumstances, it’s hard to sustain an enterprise composed of hundreds of locations with expensive equipment. One of its competitors, Gold’s Gym, with 700 locations worldwide and self-described as “the world’s trusted fitness authority for more than 50 years,” recently filed for Chapter 11 bankruptcy protection.
24 Hour Fitness did send an email to the people impacted by the layoff explaining the rationale and reasons behind the layoffs, along with important information surrounding the terms of their dismissal. CEO Tony Ueber said, “These are painful decisions, and we do not make them lightly.”
This isn’t a one-time thing. There have been an alarming number of companies that have laid off people in the same cold, impersonal way.
Ridesharing company Uber previously announced a layoff of 3,500 employees, representing 14% of its workforce. In a sign of the times, with employees working from home, Uber informed the job-loss casualties via an online Zoom call. The head of Uber’s customer service office, Ruffin Chaveleau, told workers that today was their last day at the company.
Chevaleau soberly shared that Uber’s business was hit hard. The company’s business dropped by over 50%. She said, “With trip volume down, the difficult and unfortunate reality is there is not enough work for many front-line customer support employees.” Chaveleau added, “As a result, we are eliminating 3,500 front-line customer support roles. Your role is impacted and today will be your last working day with Uber.” Uber CEO Dara Khosrowshahi said of the downsizing, “We’re focused on navigating through this crisis that absolutely leaves us in a position, a stronger position, as the world starts to recover.” Khosrowshahi announced that he will be forsaking his base salary.
Bird, the scooter-rental startup, fired 406 employees in a harsh “Black Mirror” style. The unsuspecting workers were asked to log into a one-way Zoom call, after being informed that all other appointments were cancelled. A disembodied voice read a script informing the person that they’ve been laid off. Their Slack and other accounts were shut off and given end dates.
The airline industry has been one of the hardest-hit sectors by the pandemic. The federal government called for the cessation of nonessential travel. Even with essential travel, potential passengers have steered clear. In response to the dramatic decline in flights and acknowledging that the fortunes of airlines won’t turn around anytime soon, they’ve enacted massive layoffs.
The airlines received billions of dollars from the government to bail them out. The federal bailout for the airline industry barred layoffs, involuntary furloughs or pay cuts for employees. The airline executives, including United Airlines, were cold and harsh. United didn’t even try to hide the fact that job cuts are coming as soon as the required period to retain employees ends. Once the prohibition is lifted, as early as Oct. 1, the workers will receive their pink slips. To add insult to injury, workers were told to take unpaid or lower-paid leaves in the interim.
Airbnb took a different, more enlightened approach. The company announced that it was downsizing 25% of its workforce. Roughly 1,900 people out of the company’s 7,500 total workforce will lose their jobs. What’s different about Airbnb is the manner in which the company informed employees of its plans.
In a message to staff, Airbnb cofounder and CEO Brian Chesky said, “Some very sad news. Today, I must confirm that we are reducing the size of the Airbnb workforce.” Chesky then advised his employees that he will be transparent and offer details, so that everyone is fully aware of what’s happening. He was forthright and didn’t try to spin the narrative, as he stated, “We are collectively living through the most harrowing crisis of our lifetime, and as it began to unfold, global travel came to a standstill. Airbnb’s business has been hit hard, with revenue this year forecasted to be less than half of what we earned in 2019.”
With all of the stress and anxiety we’re all going through, it’s almost understandable how corporate executives can lose sight of the feelings of the people who’ve been selected for downsizing. It’s important for them to remember that they are human beings. Getting fired is an unpleasant and—at times—life-altering experience. In light of the current job market, in which over 40 million Americans have filed for unemployment since mid-March, it’s one of the worst times to be let go.
Due to Covid-19, it’s hard to conduct face-to-face meetings, but maybe this should happen anyway—with the appropriate precautions, of course. At the very least, instead of mass firings, companies could allocate the time to fully express courtesy and respect to their people by speaking with everyone individually.
The people involved with downsizing have to be transparent, empathetic and share the reasons why their employees are being asked to leave. A sufficient amount of time must be set aside to discuss and answer any and all questions related to the layoffs. The human resources professionals or managers should provide all of the necessary facts and relevant information regarding severance packages, whether or not job search assistance is offered, if there’s a chance to be rehired and other important matters.
David Ulevitch, a general partner at the preeminent venture capital firm, Andreessen Horowitz, offered advice on how to compassionately conduct layoffs while employees are working remotely, “The layoff may cause serious financial and psychological distress. It will also force them into a wrenching emotional disconnect from their friends and colleagues.” He advised managers, “Your duty as a leader is to do everything in your power to give them as many resources as you can and offer them the most dignified exit possible. This will take careful thought and planning.”
Just because we’re living in volatile and chaotic times, it doesn’t mean that corporations can abrogate their responsibilities to their employees when they need hand-holding, reassurance and guidance the most.