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HR’s role in conducting layoffs legally and responsibly

January 23, 2023, 12:58 PM UTC
Woman with moving boxes in office
HR leaders are at the center of decision-making during layoffs.
Getty Images

Good morning!

Handling layoffs has always been a tough yet constant reality of the HR function. People leaders are almost always at the center of the decision-making, one that’s both challenging and life-altering for employees. Suffice it to say layoffs should not be taken lightly.

Recent workforce reductions—Goldman Sachs, Alphabet, and Salesforce—have put a brighter spotlight on the practice. Companies that gave inadequate notice, unclear communication, or subpar severance packages have all been held up as examples of what not to do.

The consequences of a poor layoff strategy extend beyond fleeting bad publicity and some tearful employees. “Internal delivery, CEO wording, and severance details can burnish or taint a company’s employer brand for years,” writes my colleague Geoff Colvin. In an in-depth piece for Fortune, he outlines best practices for rightsizing a business and asks perhaps the most pressing question: Does an objectively good approach to layoffs actually exist?

The answer, unsurprisingly, is that there might be one, but it’s different for every company. Still, there are some commonly agreed-upon ways to treat employees. 

Here’s an excerpt from Geoff on how to layoff employees responsibly (and with heart):

“In the heat of conducting layoffs, there’s no definitive best approach to choosing who goes. Some functions, like recruiting, will invariably face deeper cuts than others. Decisions based on performance and potential are ideal, though managers must accept that their judgment may be flawed if the company doesn’t have rigorous evaluations of each employee. Even then, the company may not have time to give all employees the full consideration they deserve, or the resulting roster of to-be-laid-off employees may reflect a disparate impact on employees in legally protected classes and require adjusting…

The critical factor to bear in mind is that the decision is about more than money. It sends a message to the broader firm. Generous treatment of departing colleagues goes a long way toward quelling the intense anxieties of remaining workers.”

Read the full story here.

Amber Burton
amber.burton@fortune.com
@amberbburton

Reporter's Notebook

The most compelling data, quotes, and insights from the field.

On Friday, Google parent company Alphabet announced it would cut 12,000 jobs, roughly 6% of its workforce. In an internal memo to staffers, the company offered yet another glimpse of how some of the largest companies handle severance packages. In comparison to other tech companies, laid-off Googlers fared well:

They will receive a minimum of 16 weeks' pay with an additional two weeks for every year at Google. Restricted stock units scheduled to vest over the next 16 weeks will still be granted. Laid-off workers will also get their expected 2022 bonuses and reimbursement for remaining PTO. See how Google’s severance package compares to its tech peers. And if you’re curious about the banking sector, take a look inside Goldman’s severance offer, here.

Around the Table

A round-up of the most important HR headlines, studies, podcasts, and long-reads.

- A man in France sued to get his job back, claiming it was his right not to be fun at work. The New Yorker

- Some office buildings are offering luxury amenities akin to a private members club to attract new tenants. The Economist

- Young employees are shocked when they get laid off. Older ones? Not so much. New York Times

- White Castle and Chipotle are among the fast-food chains adding robots to their staff because they can’t find enough workers. CNBC

Watercooler

Everything you need to know from Fortune.

Hiring slowdown. Bank of America is slowing down hiring after overshooting its target headcount, says CEO Brian Moynihan. —Katherine Doherty

My company, my rules. Employees don’t get to choose whether they work from home, says Morgan Stanley CEO James Gorman. “I want them with other employees at least three or four days.” —Prarthana Prakash

Gender-neutral Davos. Companies are increasingly implementing “gender-balanced” policies like gender-neutral parental leave and egg-freezing benefits. —Peter Vanham

This is the web version of CHRO Daily, a newsletter focusing on helping HR executives navigate the needs of the workplace. Today’s edition was curated by Paolo Confino. Sign up to get it delivered free to your inbox.