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The gloom of layoff and living through it

March 13, 2009


Its perhaps the worst phase to witness in ones career. Something that most people in India have not been exposed to much in the past. While we have seen the .com bust and the 2001-0layoff2 slowdown arising out of 9/11 attack in US, nothing has been close to what we are witnessing today in the world. Its gloomy and depressing and us HR folks are caught right in the middle of it barring a few less effected industries. Its terrible to the level of causing excruciating pain to be in HR and execute some of these layoffs. At first there is a denial that somehow we wont have to do it, then there is hope that it wont be too bad. But when the realisation hits, you keep oscillating between keeping a professional face and a feeling of deep sorrow and regret on the other. It gets worse if you have recruited most of the people and know them personally. But then it happens. And anyone can be on the receiving end. It could be you, me or even the guys who maintain this web service.
Very often the word spreads out that there is a possibility of a layoff or downsizing. Many times particularly for large organisations this is kept closed and executed on one fine day on unassuming employees coming to a regular day at work. Remember Jet Airways?

Organisations dont have much choice and that explains why they behave like how Jet did. They have to strike deep and finish it in one blow. It would be sadistic to keep amputating parts of the organisation one after another.
Smaller organisations tend to go over this layoff process in a much personal manner since their size gives them the opportunity to execute this by meeting people in person. This also happens because in smaller organisations people know each other much better and thats makes the separation process more difficult to manage emotionally.
Where does the need come from?
Its always got to do with the interests of the shareholders. In some cases this could be because of a strategic choice of a company, a merger or an acquisition. If the organisation or a unit is not efficient and profitable, its eating into the returns of the shareholders. Hence there is a need for a review of headcount. Traditional Indian companies may have a higher threshold for such reviews, whereas MNCs and entrepreneurial organisations might have a lower threshold. The reasons for these inefficiencies could be because of poor management, economic and political changes necessitating a layoff or even poor standing against chosen benchmarks. Its usually signed off by the board or the executive team.
The making of the list
If its less than 5% and cuts across the company then this is usually the underperformers. However when the layoff is larger or is restricted to a unit or division then its a combinaiton of last in first outs, underperformers and good to even high performers. No one really gets spared. The organisation works towards having the least no. of resources required to do a job. In this process they will review every single headcount to meet its target reduction in overheads.
The communication process
Companies may chose to create an awareness program to make its employees ready for a layoff since rumour mills are running overime during these periods. They might later send out the final communication either through emails, personal discussions or even by putting up a list at the security gate. Some companies may give notice for a couple of weeks, while others put this with immediate effect. Different schools of thought support different actions. There is usually a retrenchment compensation as per the contract of employment and some companies may try to provide outplacement and other employee assistance programs. There are many articles that draw out how this process can be better handled. I found the article in the HR Magazone of SHRM quite comprehensive – Layoff Aftermath, November 2008 issue.

Prepare for the worst:
If you hear about the rumours start preparing for the worst. Its in your interest to keep your network warm. Also mental preparation will help manage the shock if the rumours are true. Whatever it is, try to confirm the rumours by speaking to your senior managers or the HR team. Its in times like these when your network is truly your networth!
What if I am on the list?
Its most unfortunate but it can happen to anyone in todays times. In India particularly dealing with layoff is even more difficult since there is a stigma attached to being without a job. However, corporates are likely to be more empathetic to these issues today. All said and done this is still very challenging. I have listed down a few things that one must look into if ones name is indeed in the list:
a) The decision wont change – Avoid any plans of convincing the management that you should be retained. 
b) Control your anger and try to be rational – It doesnt serve to burn bridges with any organisation anytime even if it means a layoff.
c) Attempt negotiations for the maximum benefits you can get out of the company – references, consultant leads, outplacement service, extended benefits etc.
d) Dont take decisions to join another company in the rush of the moment, though in a recessionary economy that may not be a bad idea. Think through what you want to do. Remeber that the layoff compensation that you will get will help you sail through atleast a couple of months with ease. Its really an unwritten societal pressure that spoils our sleep. Try and look at this rationally.
e) Stay in touch with the company and your manager – the guilt running in the organisation can work to your advantage with better references, leads etc. Avoid your ego coming in between.
f) Fill your time in with useful activity, join classes, gym – anything that is productive and keeps your mind engaged and positive.
g) Dig deep into your network. Consultants and all will work fine but network can prove most useful in recessionary times.
h) Beyond a point dont be too choosy. Its an act of balancing by being rational. Haste decisions and extremely choosy behaviour can both be equally bad.
i) Share with your family and friends. It will be easier to cope once they understand the situation.
j) Keep overheads low. Failing to do so will increase the pressure on you, which might work against you.
k) To the extent possible operate out of your hometown. Its best if this happens to be in a metro. 
l) Disclose the layoff story or not? – this is a personal decision. Its possible that in the Background checks they might figure this by themselves and hence a disclosure may be a good idea. However if you are attending interview immediately after lay off then you could avoid full disclosure as long as you have the support from your company to help you out appropriately. In recessionary times like today, corporates would be more understanding. Yet its a risk one has to manage carefully because there could be a perception of underperformance being the reaons for layoff. Go into these discussions with your defences built strongly.

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One Comment leave one →
  1. Anthony Cline permalink
    March 13, 2009 11:05 pm

    Interesting read. Thanks for sharing.

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