Last week I read an article about a startup called Code42, based in Minneapolis. After raising additional funds and seeing 100% year over year growth employees might have felt pretty good about their future. Or maybe not…
The company recently laid off 30 employees.
Of course in today’s business environment it isn’t shocking that companies are still going through layoffs but it was the message from Code42 CEO Joe Payne that raised my eyebrows:
“As I looked at the aggressive nature of our plan, there were a set of people who didn’t fit the plan or didn’t have the right skill set, or didn’t have the right attitude,” Payne said in an interview. “We’re hiring like crazy for growth, let’s get the wrong people off the bus. [bold and italics added]“
Read the entire article here (five minutes max I promise).
Joe Payne is nothing if not blunt and upfront as he positions the company for future growth. Part of me admires sending that blunt message. He’s effectively saying “No scrubs need apply.”
Sometimes layoffs are used for just this reason: getting people off the bus who don’t have the skill set or attitude that the company needs in the future. It’s almost refreshing for someone to just call it what it is.
But it was the wrong move.
Payne’s public quote is unnecessary and harmful:
What about the laid off employees at Code42? Payne just called them out as people who didn’t fit an aggressive growth plan through skill set or attitude. What does that even mean? Did they challenge a new leadership team? Projects? Company direction? Or were they truly people who didn’t have a skill set (technical, functional, whatever) the company needed for growth?
How are these laid off employees going to find a new job? Payne’s statements feed into the stereotype that the only people who get laid off are low performers. A future hiring manager may Google the company name, see that quote and assume a candidate was laid off because of their “attitude.” That’s a black mark next to your name that a “generous” severance plan won’t wipe away.
By blatantly calling out why some people were laid off, it puts the company at risk for legal action. No mention was made of any kind of process they used to determine skill set or “fit.” How did they decide who had the skills the company needed? Did the company offer training to the employees before laying them off? The statements made by the CEO can easily sound like a cover for age or gender discrimination. When you make a blunt statement like that in public you open your company to scrutiny, can your company withstand that scrutiny?
Who wants to work for Joe Payne? Payne’s message is understandable but to say that publicly is inconsiderate and classless. His words may follow the laid-off as they try to find new jobs. Do you want to work for someone who has that little consideration for others?
What could the company have done differently? I am not advocating to keep un-productive or poor performing people. As business leaders we have to make tough decisions that include eliminating positions or laying off employees.
But we can choose how we determine and communicate those layoffs/terminations. Making statements, like the above quote, about the attitude or skill set of laid-off employees is kicking them while their down. You’ve already laid the employee off; it’s unnecessary. If the people let go are truly poor performers you’ve already sent a clear message to the rest of the company. Why would you need to make that public?