Lay off as one of the measure....- Puja Sinha ( HR, APML)

 

Currently, COVID-19 is spreading like wildfire and leaving behind its deadly impact across the world. IMF has already predicted the contraction of the world economy in 2020 by 3% as compared to nearly 2.3% GDP growth in 2019.  Some experts are projecting one of the worst recessions the world has ever seen. This would have a varied impact on businesses depending on the sector, financial muscle, and management decisions of the company. While certain businesses may permanently close down, some will struggle and some will come out as a winner. There will be both permanent and temporary lay-offs leaving millions of people jobless. Even in this imminent recession, a certain set of companies into health-care, pharma, medical equipment, online media & entertainment, e-learning, digital payment/ fintech, food processing, etc. are witnessing increased demand and will create new job opportunities for some. Human Resources are the lifeline of any organization and need to be handled with the utmost care and dignity all the time, and not just during this crisis. Companies are planning to take various short-term and long terms HR measures best suited to them in their wisdom.  So among all the measures LAYOFFS is the decision taken by most of the companies.

So, A layoff is the temporary suspension or permanent termination of employment of an employee or, more commonly,a group of employees (collective layoff) for business reasons, such as personnel management or downsizing (reducing the size of) an organization.

 

Many of the companies were forced to choose layoff as one of the measurelike;

 

 

Glassdoor lays off 300 employees amid COVID-19 crisis

Glassdoor already had paused hiring cut program costs and reduced executive salaries, with Sutherland-wong taking 50% reduction in total cash compensation for 2020

Job search and recruiting giant Glassdoor, based in Mill Valley, has laid off 300 employees, or 30% of its workforce, including 81 workers in Marin, according to a media report. Most of the job losses came out of the company's Chicago office.

“Words cannot describe how sad I am that we find ourselves in this position,” Glassdoor CEO Christian Sutherland-Wong said in a memo sent to employees. “It truly breaks my heart to say goodbye to such a talented group of people for reasons that are outside of their control.”

Employees affected by the layoffs will get a minimum of three months’ pay, health care costs covered through the end of the year, and will be allowed to keep their Glassdoor laptop ‘to help with (their) job search.

Livspace lays off 450 employees amid lockdown

 

The Bengaluru-based home design and renovation startup, Livspace is laying off 450 people which constitutes approx. 15% of its workforce as the COVID-19 pandemic and the nationwide lockdown which has negatively impacted its business.

The startup had raised about $150 million across multiple rounds from investors like TPG Growth, Goldman Sachs, Jungle Ventures, Bessemer Venture Partners, and Helion Ventures.

Livspace, which was started by Sharma and Anuj Srivastava in 2015, said the lockdown restrictions impacted its experience centers and its last-mile operations.

"The impact of COVID-19 on our business has been sudden and unpredictable. Hence, it was important that we become a leaner and more focused organization," said Ramakant Sharma, Co-founder, and COO at Livspace.

 

COVID-19: Swiggy to lay off more than 1100 employees.

Sriharsha Majety, co-founder & CEO, Swiggy shared and email with the employees highlighting the current situation and pointed out the key benefits to the employees.

Swiggy will lay off more than 1100 employees over the next few days as the coronavirus pandemic has severely impacted demand, the food delivery company said in a statement. 

In the line with the above business decisions we, unfortunately have to part ways with 1100 of our employees spanning across grades and functions in the cities and head office over the next few days- Sriharsha Majety, Co-founder & CEO.

 

All impacted employees will get financial support by receiving at least 3 months of salary irrespective of their notice period or tenure & much other support like Career Transition Support, Connectivity Support, Learning Support, Relocation Support.

 

The above mentioned companies had been performing really well in the market and with these lays offs it is very clear that the employers are taking care of the employees present and future requirements.

 

 

Before going to the topic directly I want to site an example of Bird (a micro-mobility company based in Santa Monica, California, founded by Travis Vander Zanden, a former top Uber executive) hosted a meeting for its employees.

 

At 10:30 a.m., employees logged onto Zoom but were greeted only by a cracking silence. Meetings at Bird are usually always punctual and more frenzied Slack messages followed.

 "Is there audio? Why can't I hear anything?" Alvauaje messaged her colleagues.

 "We never start late," another employee remembers thinking. "This is strange. Something feels off."

 For the next five minutes, employees stared at a sparse slide with a dark grey background that said only "COVID-19."

"It was not our brand color or font, which frankly was unsettling in a way I couldn't articulate," Alvauaje said.

Thinking there were technical difficulties, some employees logged-off and were never able to return to the meeting. Then, after five minutes of dead air that seemed like an eternity, a robotic-sounding, disembodied voice came on the line.

 And within 120 seconds, 406 people in the company were laid-off.

"Lots of companies have to lay people off right now," said Jenny Alvauaje, a 23-year-old Bird data scientist who was dismissed after a year and half at the company. "People will recognize the companies who did it well and the ones that didn't. I hope Bird is the one that is remembered as one who did it poorly."

 

The way ahead

Without a doubt, the COVID-19 crisis is forcing many businesses to confront a new reality. Measures such as layoffs, furloughs, and freezing benefits and raises all have an impact on both corporate and employer brands, but how these actions are perceived will depend on the way they are executed and communicated.

 

The earlier recession of 2008, forced many companies to make deep cuts to their workforces. Numerous retailers like Mervyn’s and Circuit City Stores Inc. closed locations, filed for bankruptcy or shut down altogether. Even companies like Yahoo!, Google, American Express, and Motorola have had to cut their workforces.

However, when the economy started looking to improve, and companies set the operations in full-swing, companies again found themselves in a quandary - winning the so-called war for talent: how to attract and retain the best and brightest.

In 2009, Christopher D. Zatzick, Mitchell L. Marks, and Roderick D. Iverson, wrote an article, “Which way should you downsize in a crisis?”

Christopher D. Zatzick, Mitchell L. Marks, and Roderick D. Iverson developed a framework that integrates the seemingly paradoxical practices of talent management and downsizing.

The framework looks at two important variables; the type of downsizing (reactive versus proactive) and the company’s approach to managing employees (control- oriented versus commitment- oriented). By first understanding an organization’s position with respect of those two dimensions, managers can diverse an optimal strategy for downsizing.

 

In general environment how can a company avoid lay off. Some of the strategy are discussed below can be the option for a company instead of laying off employees.

Freeze hiring

One of the quickest steps to implement is to freeze hiring for all non-essential positions. This allows you to consolidate the employees you have to complete the work that is essential for serving the customers of your business. You can strategically continue to hire in areas where skills are difficult to find and in positions that will immediately generate revenue for the business.

Freeze Salary and Benefit Increases

Another strategy for avoiding employee layoffs is to freeze salary and benefit increases. Workers won't be thrilled, but this will be viewed as less stringent by your critical employees than some of the next options. When business conditions are turbulent and unpredictable, it makes no sense to add additional costs to the permanent bottom line.

Let Contract and Temporary Employees Go

Contract workers and temporary employees expect to be let go when the business needs change. While this causes some turmoil in the lives of temporary employees, the employer does not have the same commitment to these workers as to regular employees.

Incentivize Employees to Leave

Ask employees to take voluntary layoffs, offer a buyout to end the employment relationship, or offer early retirement to eligible employees. All three of these actions give employees options and are viewed less negatively by the remaining staff.

Reduce Pay Rates, Fringe Benefits, or Work Hours

If you need to reduce employee pay, benefits, or hours, think through the consequences of this decision. Before considering this business decision, recognize that these actions may cause your best employees to leave, and could damage trust levels across the organization.

Schedule Unpaid Employee Furloughs

A furlough is an alternative to layoffs. In a mandatory furlough, employees take unpaid or partially paid time off of work for periods of time ranging from weeks to a year. The employees generally have either scheduled time off or call-back rights and expectations.

Examples of furloughs include closing a business for two weeks, reducing employee time on the job to three weeks a month instead of four, and asking employees to take two days a month off without pay. Other employees have been put on furloughs indefinitely.

In a furlough, benefits usually continue, which is one of the differentiating factors from a layoff. Even so, the negative impact on your workforce can be great, and many valuable employees will likely move on.

The Bottom Line: If Layoffs Are Necessary

If you've considered all these alternatives and tried some (and documented it), but still find that a workforce reduction is necessary, then you'll have to plan carefully for how to implement the layoffs. These decisions are never easy, and they're even harder to communicate to your employees. But at least you can show them that you considered every possible alternative.

 

Now as we know Different businesses are experiencing the ongoing uncertainty in fundamentally different ways and the leaders better know whether layoffs will be critical for their business continuity programs or not. However, here are some points a company can take care while implementing lay off as a measure ;

·         Companies should write why an employee is being let go in their termination notice, i.e. layoffs due to COVID-19.

·         Employers should offer to draft a letter of recommendation for employees, and offer outplacement services.

·         Help your employees claim the unemployment benefits provided by the country/ state government. (To list out a few, the Canada government is offering unemployment insurance to employees to lost jobs due to COVID-19. Certain states in the United Nation like Texas are allowing businesses to file mass unemployment claims. The Union Government of India is also planning to offer insurance to unemployed workers who have subscribed to the Employees’ State Insurance scheme).

·         Lead with empathy when laying off their workers. Employees will remember how they’re treated during this time. If they’re treated poorly, they’re more than likely going to speak poorly to their network and through online reviews about the company and their experience.

·         Do not make any promises you can’t keep. Offer all the help you can, but make sure you have the time and resources to deliver on what you promise, to avoid further disappointment down the road.

 

So , at last Devdutt Pattanaik an Indian mythologist, speaker, illustrator and author, known for his prolific writing on sacred lore, legends, folklore, fables and parables, and for challenging wilful misinterpretations of ancient Indian scriptures, stories, symbols and rituals.

 

Said “The current pandemic has hit us with the realization that, honestly, nothing lasts forever, no strengths, no weaknesses. BUT also, no challenges, no threats. Organizationally nothing lasts either-no structures, no processes, and no frameworks. We live in a world where no gurus, no prophets can predict the future. “

 

“As an HR community, we should be like Krishna. On the battlefield, Krishna is the one that enables, motivates, and guides. That is the role that HR needs to play in these times. “

 

“However, like in the Mahabharata, there are no guarantees, there are no commitments. While the pandemic may have an expiry date, nobody knows how long and the impact that may have. Every day is a new day. Decisions will be changed, payrolls will also change, and this will happen every day.”

 

“And the world in 2020 would need more "generosity." The ability to pay forward, the ability to keep relationships even when the going is tough. Generosity starts from shareholders and boards and gets translated not only on decisions BUT also on how decisions are implemented. You can break a contract, BUT don't break a relationship.”