Letting People Go: Ego and Safety

"Things are getting really tight and it's clear I'm going to have to let some people go. I've never been through this kind of 'mass layoff' situation before and I'm struggling with how to do this well. How should I be thinking about this in a way that's mindful of my staff at a personal level?"

July 6th, 2022   |    By: Wil Schroter

In a time where lots of people are announcing staff reductions left and right, it's a good time to talk about the most important aspects of dealing with the human element of reductions — Ego and Safety.

When I was a younger manager just learning how this all worked, I didn't understand the value of Ego and Safety. My "fires" turned into heated outbursts, crying, and grandstanding. I couldn't figure out what was going on and assumed these blowups were tied to the people I was letting go.

They weren't — it was entirely my fault. Even though I tried to be kind, I didn't appreciate that letting people go isn't about the transaction — it's about the person. How we manage that relationship is the transaction, and it always maps back to how we view their Ego and Safety.

Issue 1: Ego

We all have an ego, even if we're considered "very humble." It's essentially our personal identity, even though over time it has become associated with being a narcissist. Our jobs, especially in the startup world where we are creating and putting a big part of ourselves into the product, are often tied to our ego.

When we change someone's job, whether it's a promotion, demotion, or layoff, it directly impacts their ego, and that's not a small issue. When we totally overlook that issue and think about it as purely a business decision, we lose sight of the fact that we're dealing with human emotions, not a computer.

How we let people go, meaning what message we send to them, to their co-workers, and to the job market at large is an essential part of the discussion. Making someone feel valued is at its heart, but beyond that, it's about avoiding humiliation which we often overlook.

Issue 2: Safety

The moment we tell someone "We have to let you go" the first thing that comes to mind (for most folks) is "You're threatening my safety." We often don't express this as such, but safety is our ability to provide for ourselves and our families on a predictable and consistent basis.

Losing income means a direct threat to safety, and we can't underestimate how powerful that emotion is. It may be a transaction to us, a single meeting that we're dreading, but to the recipient their entire life just imploded.

It's our job to help soften that blow when we can. In some cases where a startup has just let go of a huge part of their staff, this may be functionally difficult to do, even though many of us try. But when it's a smaller, more acute situation, planning for how we can help with that safety really matters. That's everything from severance, to extending benefits, to in some cases creating an ongoing consulting gig until they get back on their feet. It matters.

The Cost of Getting This Wrong

When we do this really well, it still sucks. No one is happy about going through this process, even if it's for the better of the company. But when we get it wrong, where we totally overlook Ego and Safety, it's straight-up explosive.

What I learned over time was to think very thoroughly about how that person would feel, what social constructs would be disrupted for them (family, co-workers, friends) and what I could do to soften that blow. In short, I realized that to do this well I had to put myself in their shoes.

The difference between a discussion where someone shows clear empathy and one where it's "all business" is night and day. Many of us are going to have to go through this slog, but at least we can focus on doing it in the most humane and thoughtful way possible.

In Case You Missed It

Why We Embrace Employee Turnover This week we had one of our best team members leave to join another startup. We couldn't be happier that he's gone.

What’s the Cost of a Toxic Employee (podcast) Nearly every startup deals with a "toxic employee." And every minute we wait to address the issue, we create an even bigger organizational challenge that will be way too hard to tackle down the road.

Treat Departing Employees like Future Employees While saying goodbye to departing employees isn’t easy, how we handle it is totally in our control and can impact our future professional relationships.


About the Author

Wil Schroter

Wil Schroter is the Founder + CEO @ Startups.com, a startup platform that includes BizplanClarity, Fundable, Launchrock, and Zirtual. He started his first company at age 19 which grew to over $700 million in billings within 5 years (despite his involvement). After that he launched 8 more companies, the last 3 venture backed, to refine his learning of what not to do. He's a seasoned expert at starting companies and a total amateur at everything else.

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