Kaarin Vembar is obsessed with the luxury and apparel markets. She also has a sassy mouth so her managing editor decided to give her a column in an attempt to harness insight for readers. Kaarin can be reached at [email protected].
Retailers are going through a season of layoffs.
After needing additional staff during the height of the pandemic, many companies are starting to pull back and internally reorganize.
Whether technically the U.S. is in a recession or not, the larger point is that consumers are changing the way they spend. That, in turn, is causing retailers to make hard decisions about operations. And sometimes that means moving resources around, including letting people go.
While retailers are in the unenviable position of having to think through short- and long-term operational strategies, and how the economy is doing cannot be controlled, what is in control of employers is the messaging behind firings. And it hasn’t been great, folks.
There are real people behind those numbers. And when a person gets fired it not only means a loss of livelihood. It means, for many people, also a loss in healthcare.
It also does not help matters when top executives are performative about how difficult the decision is to conduct layoffs, all the while still pulling in a top salary.
Here are some of the biggest mistakes retailers (and other companies) are currently making when communicating layoffs.
1. Your workers aren’t family, you ghouls
By now many workers recognize “our employees are family” talk from companies as a red flag.
Back in 2014, in an article entitled “Your Company is not a Family,” the Harvard Business Review warned CEOs that familial talk in the workplace may feel, on the surface, like language that is about acceptance and belonging. But, the big reveal is this: in a family, parents can’t fire their children.
Also, families protect each other.
Of course businesses need to make money, and will cut people off in order to make that happen — even if that decision is hard for the C-suite. But, language that says or implies “we are all in this together” doesn’t work when someone suddenly doesn’t have money coming in.
Back in January, Glossier laid off 80 employees, which was roughly a third of the company’s workforce. Then-CEO Emily Weiss apologized to people who were impacted, saying that the retailer “made some mistakes” while trying to scale.
Fast forward to early August, and Glossier announced layoffs again. This time it was about two dozen employees, and was done as the company moves away from single-channel distribution and into wholesale. In a letter about the firings, CEO Kyle Leahy talked about better aligning the company’s resources.
“It is never easy to part ways with team members who are an important part of our community; we are immensely grateful for their contributions, and committed to making sure they feel supported throughout this transition,” Leahy wrote in a letter to staff.
The letter ended with talking about teamwork and touching the lives of people who encounter the brand, and making people feel like they are part of something bigger than themselves.
“I’m confident we are well on our way on that journey, and our future is bright,” Leahy said in her signature.
But, the future isn’t bright for the two dozen employees that just got axed. The company may be on a better path, but those people’s lives stopped.
The phrasing sounds like employees are part of a community, but part of that community was just exiled. It’s not kind. Although this may be the optimal way forward, those people impacted by the decision don’t care about the collective or the vision. And announcing layoffs in the middle of a “we are on a great path, gang” note is a mixed message at best.
Additionally, companies need to knock off the cutesy language. No one wants a sweet way of saying “you are fired.”
A number of recent layoffs address employees with an internal nickname. Allbirds called staff their “flock.” As in, “The decision to say goodbye to members of our Flock is not one we made lightly, and we are supporting impacted team members to give them a soft landing,” per a statement from the DTC company regarding layoffs.
Outside of retail, investing company Robinhood recently reduced its headcount by 23%. CEO Vlad Tenev addressed employees in a note by saying “Dear Robinhoodies,” and went on to explain how he arrived at the decision to cut the company’s workforce.
2. Saying you don’t have the money when reports say otherwise means you have spiders in your soul
Clear language about termination is key, according to an article written by our sister publication, HR Dive.
Language that is seemingly straightforward when a company’s actions go counter to what is being communicated can be problematic.
Let’s look at Shopify, which laid off 10% of its workforce at the end of July, then reported a $1.2 billion net loss and an operating loss of over $190 million. In a letter to employees, CEO Tobi Lütke explained that layoffs were a result of the company’s decision to expand rapidly based on COVID-19 forecasts regarding the growth of e-commerce.
“It’s now clear that bet didn’t pay off,” Lütke wrote.
Which is fair enough. Even if you don’t understand a corporation’s inner workings, most people understand that the pandemic happened and a bunch of things changed and it was (and still is) hard to make decisions in a rapidly changing environment.
But, that’s not how things played out. A week after firing people, Shopify invested $100 million in an e-commerce automation company named Klaviyo. So, they didn’t have enough money for employees, but they did have enough money for an expensive deal. It’s a corporation’s prerogative on how to spend its money, but if you are going to make a bold decision just stand behind that bold decision.
Additionally, Insider reported that right before Shopify fired a bunch of people the company was funding lavish team getaways. According to Insider’s reporting, internally many people were “blindsided” by the layoffs. So was the company not being straightforward with employees? Did it not fully understand its financial position? Did it suddenly realize it needed a different strategy?
Whatever it is, it’s not a good look.
3. Not telling people that they are fired until they realize they don’t have access to work accounts is the coward’s way out
Peloton is laying off around 800 employees and shutting stores, according to reports that came out earlier this week.
The layoffs are not a huge shock. The company had a burst of activity in the early days of the pandemic, followed by a rocky year which previously had the company reducing its workforce by nearly 3,000 people in February.
However, a number of employees went public and said they only learned they were let go when they were shut out of the company’s systems.
This isn’t the first time something like that has happened. In June, Coinbase reportedly fired staff by locking them out of their laptops. In the spring of 2020, Bird employees said they were locked out of their email and Slack accounts during the middle of a call announcing layoffs.
Keep in mind that dropping a bunch of employees simultaneously also doesn’t work out too well. At the end of last year, Better.com placed 900 employees on a Zoom meeting to tell them they were fired.
Robinhood did something similar. CEO Tenev reportedly announced layoffs on a Zoom call and then said that staff would be notified on email and Slack after the call if they were one of the ones fired. The result was a workforce that continued to refresh their screens to see if they still had a job or not.
Sure, these things are a way to communicate to employees that they are not working at a company anymore. But, people will absolutely remember how they went out. And won't have great things to say about the company or its leadership.
Layoffs aren’t fun, they aren’t easy and they can seriously impact the receiver’s life. They also rattle those people who are left behind at a company. A study found that after layoffs, “survivors” experienced a significant decline in job satisfaction, organizational commitment and job performance.
Which means that, even though the reasons may be complex and layered, it behooves companies to be as transparent about their actions as possible. And to think what it would be like to be on the receiving end of language and actions proceeding a layoff.
Because when you fire someone it really doesn’t matter to the individual anymore how the company is doing. The company has just proven that you are, in fact, not all in this together.