The right and wrong way to conduct mass layoffs

Mass layoffs are hitting Silicon Valley, and tech companies must ensure they are doing it right and with compassion in order to keep from hurting their financial performances and future success, Vox reported Nov. 8. 

Twitter has laid off half its workforce following Elon Musk's takeover of the company, and now Meta is reportedly preparing to lay off thousands of workers. 

These massive layoffs could soon hit other tech companies as ad sales decrease, and inflation and rising interest rates cause economic headwinds. 

According to the report, how these companies conduct layoffs could affect their financial performance and have long-reaching effects on their future success. 

At Twitter, the company began making layoffs in the middle of the night, after a week of fear, uncertainty and long hours, and many of the roughly 3,700 people who were let go didn't find out through Mr. Musk or a manager. Rather, they learned of their firing when they couldn't log into their company email.

Experts say this kind of strategy has caused workers to sue Twitter for violating labor laws by not giving them enough notice.  

Several of the company's advertisers have paused spending, which in total makes up 90 percent of Twitter's revenue, over concerns about the loss of several important content moderation roles, according to Vox

Experts say that Mr. Musk's layoff strategy could either be an anomaly or could have cascading effects on how other tech companies conduct layoffs. 

Robin Erickson, vice president of human capital at Conference Board, who studies how companies behave in crisis, told Vox it's best not to lay off employees in a crisis, as savings from layoffs are often shortsighted and rarely help a company's financial performance beyond a quarter or two.

But, if a layoff is necessary, companies should look at conducting "compassionate" layoffs. These kinds of layoffs are small, done as a last resort, communicated clearly and conducted with respect.

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