Henry Ward needed to lay off 161 employees. The CEO of Carta, an equity management platform, broke the news mid-April at a company all-hands meeting. With everyone now working remotely because of the coronavirus pandemic, he did it on Zoom.
Ward published his full announcement on Medium. He received praise internet-wide for his transparency and humanity. Organizational psychologist Adam Grant tweeted, "Here's a rare example of a leader who didn't pass the buck. This is what taking responsibility looks like."
If you're facing the unfortunate reality of impending layoffs for your own company, look to Ward's announcement for how to do so with transparency and humanity.
Prepare your talking points ahead of time.
This is not the time to shoot from the hip and ad lib your remarks. People's lives are about to change. It's likely to be emotional for you and many others in the room.
You can still speak from the heart with a prepared statement. Ward wrote a script. "I want to apologize if I sound matter of fact or even robotic," he told the Carta team. "There is a lot I need to say and I don't want to forget anything."
Give clear information about who and how many.
Start with the facts. Get to the point fast. How many people are being laid off? What percentage of the company? Which departments and teams are affected?
Give as much information as you can up front. Ward announced that 161 people were being let go, or 16 percent of the company. He said different teams would be affected differently.
Immediately tell people what to expect next.
As soon as a mass layoff is announced, there will be one burning and stressful question on everyone's mind: Am I safe?
At Carta, everyone received the news that layoffs were happening at the same time during a company all-hands meeting. Ward then told everyone how they would be notified.
If you are one of those affected with the layoff, after this meeting, you will receive an invitation for a meeting with your manager or Trifecta lead. If you do not receive a meeting invitation by 10:30am Pacific then you are unaffected.
People knew to look for a calendar invite by a certain time. This simple line of communication reduced the uncertainty.
Provide transparency about your decision-making process.
Ward went into detail about how cuts were determined. "Different teams were impacted differently based on how a slower economy affects different parts of the business," he explained. Because Carta expects to acquire fewer customers with the economic downturn, customer-facing head count was downsized. So were teams that support those teams, like recruiting and HR.
Ward then went on to outline the decision-making framework that was used to create the list of employees whom would be let go.
Take responsibility. Don't make others do your dirty work.
As CEO, leadership means taking responsibility. Ward makes it crystal clear that he made the final decision to lay off every single one of the 116 employees.
"If today is your last day, there is only one person to blame and it is me," Ward said. He explains that even if managers fought to keep employees, he overrode them. "If you are one of those affected it is because I decided it. Your manager did not."
Make severance packages as generous as possible.
Carta offered all laid-off employees the maximum severance package of three months of pay, regardless of how long they had been with the company. The company is also paying all Cobra premiums through the end of 2020. "We are in the early innings of a global health crisis," Ward said. "Everyone needs health care."
To help with job hunting and networking, Ward also created an alumni network Slack channel and invited all former and current Carta employees.
Laying off employees will weigh heavily on any CEO. Despite the heavy burden, Ward was able to display true leadership in a time of tremendous crisis. Hopefully, other CEOs follow his example.