Layoff Announcement to Employees: 3 Good & Bad Examples
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Communicating layoffs is an exercise that should be taken delicately.
Here, we showcase three layoff announcement examples for people leaders. We share one that does it poorly (Microsoft), does it well (Airbnb), and does an above average effort (Uber).
Microsoft
Situation
In 2014, Microsoft announced 12,500 job cuts to it’s phone division.
Microsoft’s Executive VP, Stephen Elop, delivered the news via email.
The Layoff Announcement: What Went Well
None
The Layoff Announcement: What Didn’t Go Well
Unclear beginning. It’s a layoff memo masquerading as a corporate strategy memo. We see a lot of the same corporate jargon that plague typical executive emails.
Misleading. Elop claims early in the email that the “direction…is largely unchanging.”
Insensitive language. Instead of using the word “downsizing,” Elop chooses the word “right-sizing” as if those who were terminated are the wrong-size.
Most important information is buried at the bottom. The “reduction of 12,500…employees” finally appears at the bottom in the 11th paragraph.
Vague. Elop promises “severance benefits” to affected folks, but doesn’t say what it is.
The Layoff Email
Hello there,
Microsoft's strategy is focused on productivity and our desire to help people "do more." As the Microsoft Devices Group, our role is to light up this strategy for people. We are the team creating the hardware that showcases the finest of Microsoft's digital work and digital life experiences, and we will be the confluence of the best of Microsoft's applications, operating systems and cloud services.
To align with Microsoft's strategy, we plan to focus our efforts. Given the wide range of device experiences, we must concentrate on the areas where we can add the most value. The roots of this company and our future are in productivity and helping people get things done. Our fundamental focus - for phones, Surface, for meetings with devices like PPI, Xbox hardware and new areas of innovation - is to build on that strength. While our direction in the majority of our teams is largely unchanging, we have had an opportunity to plan carefully about the alignment of phones within Microsoft as the transferring Nokia team continues with its integration process.
It is particularly important to recognize that the role of phones within Microsoft is different than it was within Nokia. Whereas the hardware business of phones within Nokia was an end unto itself, within Microsoft all our devices are intended to embody the finest of Microsoft's digital work and digital life experiences, while accruing value to Microsoft's overall strategy. Our device strategy must reflect Microsoft's strategy and must be accomplished within an appropriate financial envelope. Therefore, we plan to make some changes.
We will be particularly focused on making the market for Windows Phone. In the near term, we plan to drive Windows Phone volume by targeting the more affordable smartphone segments, which are the fastest growing segments of the market, with Lumia. In addition to the portfolio already planned, we plan to deliver additional lower-cost Lumia devices by shifting select future Nokia X designs and products to Windows Phone devices. We expect to make this shift immediately while continuing to sell and support existing Nokia X products.
To win in the higher price segments, we will focus on delivering great breakthrough products in alignment with major milestones ahead from both the Windows team and the Applications and Services Group. We will ensure that the very best experiences and scenarios from across the company will be showcased on our products. We plan to take advantage of innovation from the Windows team, like Universal Windows Apps, to continue to enrich the Windows application ecosystem. And in the very lowest price ranges, we plan to run our first phones business for maximum efficiency with a smaller team.
We expect these changes to have an impact to our team structure. With our focus, we plan to consolidate the former Smart Devices and Mobile Phones business units into one phone business unit that is responsible for all of our phone efforts. Under the plan, the phone business unit will be led by Jo Harlow with key members from both the Smart Devices and Mobile Phones teams in the management team. This team will be responsible for the success of our Lumia products, the transition of select future Nokia X products to Lumia and for the ongoing operation of the first phone business.
As part of the effort, we plan to select the appropriate business model approach for our sales markets while continuing to offer our products in all markets with a strong focus on maintaining business continuity. We will determine each market approach based on local market dynamics, our ability to profitably deliver local variants, current Lumia momentum and the strategic importance of the market to Microsoft. This will all be balanced with our overall capability to invest.
Our phone engineering efforts are expected to be concentrated in Salo, Finland (for future, high-end Lumia products) and Tampere, Finland (for more affordable devices). We plan to develop the supporting technologies in both locations. We plan to ramp down engineering work in Oulu. While we plan to reduce the engineering in Beijing and San Diego, both sites will continue to have supporting roles, including affordable devices in Beijing and supporting specific US requirements in San Diego. Espoo and Lund are planned to continue to be focused on application software development.
We plan to right-size our manufacturing operations to align to the new strategy and take advantage of integration opportunities. We expect to focus phone production mainly in Hanoi, with some production to continue in Beijing and Dongguan. We plan to shift other Microsoft manufacturing and repair operations to Manaus and Reynosa respectively, and start a phased exit from Komaron, Hungary.
In short, we will focus on driving Lumia volume in the areas where we are already successful today in order to make the market for Windows Phone. With more speed, we will build on our success in the affordable smartphone space with new products offering more differentiation. We'll focus on acquiring new customers in the markets where Microsoft's services and products are most concentrated. And, we'll continue building momentum around applications.
We plan that this would result in an estimated reduction of 12,500 factory direct and professional employees over the next year. These decisions are difficult for the team, and we plan to support departing team members with severance benefits.
More broadly across the Devices team, we will continue our efforts to bring iconic tablets to market in ways that complement our OEM partners, power the next generation of meetings & collaboration devices and thoughtfully expand Windows with new interaction models. With a set of changes already implemented earlier this year in these teams, this means there will be limited change for the Surface, Xbox hardware, PPI/meetings or next generation teams.
We recognize these planned changes are broad and have very difficult implications for many of our team members. We will work to provide as much clarity and information as possible. Today and over the coming weeks leaders across the organization will hold town halls, host information sharing sessions and provide more details on the intranet.
The team transferring from Nokia and the teams that have been part of Microsoft have each experienced a number of remarkable changes these last few years. We operate in a competitive industry that moves rapidly, and change is necessary. As difficult as some of our changes are today, this direction deliberately aligns our work with the cross company efforts that Satya has described in his recent emails. Collectively, the clarity, focus and alignment across the company, and the opportunity to deliver the results of that work into the hands of people, will allow us to increase our success in the future.
Regards,
Stephen
Airbnb
Context
Airbnb laid off 25% of it’s workforce in early May 2020, due to coronavirus’ impact on the travel industry.
The Layoff Announcement: What Went Well
There were many noteworthy things about Brian Chesky’s layoff email:
Got to the point quickly. After a short greeting, he shares in the second sentence that he has “sad news.”
Shared the why. Explained what happened, why layoffs were necessary, and how the layoffs were decided.
Used plain language. Very little corporate jargon was used.
Use of numbers and detail. Made his statement feel precise, factual, and less vague. He also used precise numbers regarding the timing of layoffs.
Compassion. Not only was the email heartfelt, but Airbnb’s generosity shines through with the exceptions granted to the departed employees including 12 months of health insurance and the removal of the one-year equity cliff.
Respect. Not only does Chesky say that he is “truly sorry,” but he also shares this incredible quote: “One of the most important ways we can honor those who are leaving is for them to know that their contributions mattered, and that they will always be part of Airbnb’s story.”
The Layoff Announcement: What Didn’t Go Well
Nothing. Very well done.
The Layoff Email
This is my seventh time talking to you from my house. Each time we’ve talked, I’ve shared good news and bad news, but today I have to share some very sad news.
When you’ve asked me about layoffs, I’ve said that nothing is off the table. Today, I must confirm that we are reducing the size of the Airbnb workforce. For a company like us whose mission is centered around belonging, this is incredibly difficult to confront, and it will be even harder for those who have to leave Airbnb. I am going to share as many details as I can on how I arrived at this decision, what we are doing for those leaving, and what will happen next.
Let me start with how we arrived at this decision. We are collectively living through the most harrowing crisis of our lifetime, and as it began to unfold, global travel came to a standstill. Airbnb’s business has been hit hard, with revenue this year forecasted to be less than half of what we earned in 2019. In response, we raised $2 billion in capital and dramatically cut costs that touched nearly every corner of Airbnb.
While these actions were necessary, it became clear that we would have to go further when we faced two hard truths:
We don’t know exactly when travel will return.
When travel does return, it will look different.
While we know Airbnb’s business will fully recover, the changes it will undergo are not temporary or short-lived. Because of this, we need to make more fundamental changes to Airbnb by reducing the size of our workforce around a more focused business strategy.
Out of our 7,500 Airbnb employees, nearly 1,900 teammates will have to leave Airbnb, comprising around 25% of our company. Since we cannot afford to do everything that we used to, these cuts had to be mapped to a more focused business.
A more focused business
Travel in this new world will look different, and we need to evolve Airbnb accordingly. People will want options that are closer to home, safer, and more affordable. But people will also yearn for something that feels like it’s been taken away from them — human connection. When we started Airbnb, it was about belonging and connection. This crisis has sharpened our focus to get back to our roots, back to the basics, back to what is truly special about Airbnb — everyday people who host their homes and offer experiences.
This means that we will need to reduce our investment in activities that do not directly support the core of our host community. We are pausing our efforts in Transportation and Airbnb Studios, and we have to scale back our investments in Hotels and Lux.
These decisions are not a reflection of the work from people on these teams, and it does not mean everyone on these teams will be leaving us. Additionally, teams across all of Airbnb will be impacted. Many teams will be reduced in size based on how well they map to where Airbnb is headed.
How we approached reductions
It was important that we had a clear set of principles, guided by our core values, for how we would approach reductions in our workforce. These were our guiding principles:
Map all reductions to our future business strategy and the capabilities we will need.
Do as much as we can for those who are impacted.
Be unwavering in our commitment to diversity.
Optimize for 1:1 communication for those impacted.
Wait to communicate any decisions until all details are landed — transparency of only partial information can make matters worse.
I have done my best to stay true to these principles.
Process for making reductions
Our process started with creating a more focused business strategy built on a sustainable cost model. We assessed how each team mapped to our new strategy, and we determined the size and shape of each team going forward. We then did a comprehensive review of every team member and made decisions based on critical skills, and how well those skills matched our future business needs.
The result is that we will have to part with teammates that we love and value. We have great people leaving Airbnb, and other companies will be lucky to have them.
To take care of those that are leaving, we have looked across severance, equity, healthcare, and job support and done our best to treat everyone in a compassionate and thoughtful way.
Severance
Employees in the US will receive 14 weeks of base pay, plus one additional week for every year at Airbnb. Tenure will be rounded to the nearest year. For example, if someone has been at Airbnb for 3 years and 7 months, they will get an additional 4 weeks of salary, or 18 weeks of total pay. Outside the US, all employees will receive at least 14 weeks of pay, plus tenure increases consistent with their country-specific practices.
Equity
We are dropping the one-year cliff on equity for everyone we’ve hired in the past year so that everyone departing, regardless of how long they have been here, is a shareholder. Additionally, everyone leaving is eligible for the May 25 vesting date.
Healthcare
In the midst of a global health crisis of unknown duration, we want to limit the burden of healthcare costs. In the US, we will cover 12 months of health insurance through COBRA. In all other countries, we will cover health insurance costs through the end of 2020. This is because we’re either legally unable to continue coverage, or our current plans will not allow for an extension. We will also provide four months of mental health support through KonTerra.
Job support
Our goal is to connect our teammates leaving Airbnb with new job opportunities. Here are five ways we can help:
Alumni Talent Directory — We will be launching a public-facing website to help teammates leaving find new jobs. Departing employees can opt-in to have profiles, resumes, and work samples accessible to potential employers.
Alumni Placement Team — For the remainder of 2020, a significant portion of Airbnb Recruiting will become an Alumni Placement Team. Recruiters that are staying with Airbnb will provide support to departing employees to help them find their next job.
RiseSmart — We are offering four months of career services through RiseSmart, a company that specializes in career transition and job placement services.
Employee Offered Alumni Support — We are encouraging all remaining employees to opt-in to a program to assist departing teammates find their next role.
Laptops — A computer is an important tool to find new work, so we are allowing everyone leaving to keep their Apple laptops.
Here is what will happen next
I want to provide clarity to all of you as soon as possible. We have employees in 24 countries, and the time it will take to provide clarity will vary based on local laws and practices. Some countries require notifications about employment to be received in a very specific way. While our process may differ by country, we have tried to be thoughtful in planning for every employee.
In the US and Canada, I can provide immediate clarity. Within the next few hours, those of you leaving Airbnb will receive a calendar invite to a departure meeting with a senior leader in your department. It was important to us that wherever we legally could, people were informed in a personal, 1:1 conversation. The final working day for departing employees based in the US and Canada will be Monday, May 11. We felt Monday would give people time to begin taking next steps and say goodbye — we understand and respect how important this is.
Some employees who are staying will have a new role, and will receive a meeting invite with the subject “New Role” to learn more about it. For those of you in the US and Canada who are staying on the Airbnb team, you will not receive a calendar invite.
At 6pm pacific time, I will host a world@ meeting for our Asia-Pacific teams. At 12am pacific time, I will host a world@ meeting for our Europe and Middle East teams. Following each of these meetings, we’ll proceed with next steps in each country based on local practices.
I’ve asked all Airbnb leaders to wait to bring their teams together until the end of this week out of respect to our teammates being impacted. I want to give everyone the next few days to process this, and I’ll host a CEO Q&A again this Thursday at 4pm pacific time.
Some final words
As I have learned these past eight weeks, a crisis brings you clarity about what is truly important. Though we have been through a whirlwind, some things are more clear to me than ever before.
First, I am thankful for everyone here at Airbnb. Throughout this harrowing experience, I have been inspired by all of you. Even in the worst of circumstances, I’ve seen the very best of us. The world needs human connection now more than ever, and I know that Airbnb will rise to the occasion. I believe this because I believe in you.
Second, I have a deep feeling of love for all of you. Our mission is not merely about travel. When we started Airbnb, our original tagline was, “Travel like a human.” The human part was always more important than the travel part. What we are about is belonging, and at the center of belonging is love.
To those of you staying,
One of the most important ways we can honor those who are leaving is for them to know that their contributions mattered, and that they will always be part of Airbnb’s story. I am confident their work will live on, just like this mission will live on.
To those leaving Airbnb,
I am truly sorry. Please know this is not your fault. The world will never stop seeking the qualities and talents that you brought to Airbnb…that helped make Airbnb. I want to thank you, from the bottom of my heart, for sharing them with us.
Brian
Uber
Situation
In 2020, Uber announced that it was cutting 3,000 jobs, just two weeks after announcing they were cutting 3,700 jobs.
The Layoff Announcement: What Went Well & Didn’t Go Well
Dara Khosrowshahi’s email is not as vague as the Microsoft layoff email, but not as clear and authentic as the Airbnb email.
Overall, he does try to be as transparent as possible: explain why it happened and refusing to make grand promises. His authentic tone is just not as strong as Chesky’s.
The Layoff Email
Subject: A very difficult day, and what's next
Team Uber:
These have been unprecedented and challenging times for everyone—our societies, our governments, our families, our economies, all around the world. They've also been challenging for Uber, and many of you, as you've waited for us to define the road ahead. I've said clearly that we had to take tough action to resize our company to the new reality of our business, and that I would come back to you this week with the specifics.
Today I have the specifics: we have made the incredibly difficult decision to reduce our workforce by around 3,000 people, and to reduce investments in several non-core projects. As a leadership team we had to take the time to make the right decisions, to ensure that we are treating our people well, and to make certain that we could walk you through our decision making in the sort of detailed and transparent manner you deserve.
Where we started and hard choices
We began 2020 on an accelerated path to total company profitability. Then the coronavirus hit us with a once-in-a-generation public health and economic crisis. People are rightfully staying home, and our Rides business, our main profit generator, is down around 80%. We're seeing some signs of a recovery, but it comes off of a deep hole, with limited visibility as to its speed and shape.
You've heard me say it before: hope is not a strategy. While that's easy to say, the truth is that this is a decision I struggled with. Our balance sheet is strong, Eats is doing great, Rides looks a little better, maybe we can wait this damn virus out...I wanted there to be a different answer. Let me talk to a few more CEOs...maybe one of them will tell me some good news, but there simply was no good news to hear. Ultimately, I realized that hoping the world would return to normal within any predictable timeframe, so we could pick up where we left off on our path to profitability, was not a viable option.
I knew that I had to make a hard decision, not because we are a public company, or to protect our stock price, or to please our Board or investors. I had to make this decision because our very future as an essential service for the cities of the world—our being there for millions of people and businesses who rely on us—demands it. We must establish ourselves as a self-sustaining enterprise that no longer relies on new capital or investors to keep growing, expanding, and innovating.
We have to take these hard actions to stand strong on our own two feet, to secure our future, and to continue on our mission.
I know that none of this will make it any easier for our friends and colleagues affected by the actions we are taking today. To those of you personally impacted, I am truly sorry. I know this will cause pain for you and your families, especially now. Many of you will be affected not because of the quality of your work, but because of strategic decisions we made to discontinue certain areas of activity, or projects that are no longer necessary, or simply because of the stark reality we face. You have been a huge part of this company and every day forward we will build on the foundations that you established, brick by brick.
Our decisions and the road forward
We have decided to re-focus our efforts on our core. If there is one silver lining regarding this crisis, it's that Eats has become an even more important resource for people at home and for restaurants; and delivery, whether of groceries or other local goods, is not only an increasing part of everyday life, it is here to stay. We no longer need to look far for the next enormous growth opportunity: we are sitting right on top of one. I will caution that while Eats growth is accelerating, the business today doesn't come close to covering our expenses. I have every belief that the moves we are making will get Eats to profitability, just as we did with Rides, but it's not going to happen overnight.
So we need to fundamentally change the way we operate. We need to make some really hard decisions about what we will and won't do going forward, based on a few principles:
We are organizing around our core: helping people move, and delivering things.We are building a cost-efficient structure that avoids layers and duplication and can scale, at speed.We are being intentional with our location strategy focused on key markets/hubs.
Mac will now lead a unified Mobility team, which will include Rides and, as of today, Transit. Mac will continue to manage our cross-cutting functions like Safety & Insurance, CommOps, U4B, and Business Development, the latter of which will be centralized across Rides, Eats, and
Given the necessary cost cuts and the increased focus on core, we have decided to wind down the Incubator and AI Labs and pursue strategic alternatives for Uber Works. Due to these decisions, Zhenya has decided it makes sense to move on from Uber. Zhenya is customer-centric to core, and I am deeply grateful for all of her hard work.
We are also looking at our geographic footprint. While it served us well for many years to cast a wide physical net, it's time to be more intentional about where we have employees on the ground. We are closing or consolidating around 45 office locations globally, including winding down Pier 70 in San Francisco and moving some of those colleagues to our new HQ in SF. And over the next 12 months we will begin the process of winding down our Singapore office and moving to a new APAC hub in a market where we operate our services.
Having learned my own personal lesson about the unpredictability of the world from the punch-in-the-gut called COVID-19, I will not make any claims with absolute certainty regarding our future. I will tell you, however, that we are making really, really hard choices now, so that we can say our goodbyes, have as much clarity as we can, move forward, and start to build again with confidence.
How we are helping departing employees
As we previewed last week, we have taken a lot of feedback and worked to provide strong severance benefits and other support for those leaving Uber, like healthcare coverage and an alumni talent directory. We're also taking care to support people in special situations a bit differently, like those on US visas or parental leaves. While the details will differ slightly by country, you can see a summary here. Every departing employee will have a 1:1 to receive the details of their individual package.
Given the global nature of these changes, and the local rules and regulations involved, the individual experience today will vary by country:
All other countries (those not listed to the right)Argentina, China, France, Germany, India, Ireland (COE only), Italy, Kenya, Netherlands, Norway, Pakistan (Karachi only), Poland, Portugal, Slovakia, South Africa, Spain, Turkey, UK (ULL only)
In these countries, we can communicate about individual impacts today.
Everyone in these countries who is affected has already received an email, and will soon have a calendar invitation to a private meeting with a manager and HR.
If you are in one of these countries and you did not receive a separate email, you are not affected.
In these countries, local laws mean that we cannot be as specific about individual impacts today.
In some countries, we will start a consultation process. In others, there are restrictions on making changes during the COVID lockdown.
If you are in one of these countries, you will get an email from Nikki describing next steps for your location. this morning, you are not affected.
If you are one of the many affected Uber teammates, I'll acknowledge right here that any package we offer, regardless of how thoughtful or generous, will never replace the opportunity to belong, to make a difference, to establish the kinds of bonds you establish with any important company or cause. We wouldn't be here without you. We will finish what you started, and we will be excited to see the great things that you will build next.
I am incredibly thankful to *everyone* reading this email, because the resilience and grit you've shown has made Uber the company it is and will continue to be. I've never had a harder day professionally than today, but Uber has consistently surprised me with the challenges it has thrown my way. But it's the toughest challenges that are worthwhile, and I know even more strongly in my heart than I ever have that Uber is worth it, and more.
Dara
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