From the first time I read how the CEO handled a layoff, I knew it demanded a comment.  But where to start? The “pivot points” seemed so clear and straight-forward, that I was convinced there had been a mistake in reporting.  But alas, reports continued that the CEO had laid off 900 employees (about 9% of the company) en masse via a Zoom call.  Now, the CEO has decided to take some time away from the business to reflect (more likely a forced break driven by the BOD because of poor optics).  So where to start?

For this CEO:

  1. Employees are most definitely not assets.  Companies struggle with this concept.  I often see mini-surveys in LinkedIn about a company’s greatest asset. Some surveys don’t even include employees. Assets have value.  They aren’t summarily dismissed.
  2. One wonders about his focus.  It is difficult to portray this CEO as a leader, let alone a “servant leader”.  Large force reductions are done to fix financials, not to address changing market conditions.  True leaders anticipate changing market conditions and adapt in advance.  Perhaps his focus on going public (at $7B valuation) caused him to lose touch with business health and the people who helped them achieve such successes.
  3. He’s a diminisher. Some leaders build others up. Some, to cover their own shortcomings, tear them down. This guy has a track record of bad behavior.

Some suggestions for all parties.

For the employees that were terminated – count your blessings.  The immediate pain and even the financial hardships, though terrible, will go away.  

For the employees that remain – hang around a bit more.  You just watched good friends and co-workers leave in a way that reflects more on the CEO’s lack of class than on their performance.  Here is some guidance about staying if you feel the company is mostly good.  But if the whole company is rife with dysfunctional leadership (which may indeed be the case), I would lobby the board to set things right (see next).

For the board – do the right thing.  It seems unlikely that this specific CEO is the only person who could keep chugging along to a successful exit.  I have met dozens of people with the right leadership capabilities and self-awareness to pull it off.  Good of you to force the “time away” but once that ostensible cooling off period has ended, make a clean break.  Cutting Travis Kalanick loose didn’t solve Uber’s problems overnight, but they were a step in the right direction.  (See especially Step 5 here.)

The pivot points are numerous, but I’ll summarize with a value that I once saw emblazoned on corporate coffee mugs – respect people.  If the CEO can’t or won’t respect people, what kind of leader are they?  What kind of company is being built?  Who would choose to stay?

(For more on workplace culture read this article.)

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