How to Layoff 2,000 People

post # 254 — December 5, 2006 — a Managing post

There’s been a lot of press about Pfizer’s decision to cut about 20 percent of its US sales force as a cost cutting measure. (That’s about 2,000 out of about 10,000 people.)

Leaving aside for the moment whether or not this is a good decision (though see my co-author Charles Green’s interesting insight on this, entitled Pfizer, Doctors, Sales and Trust), there was a challenging aspect pointed out to me in an email by Nick Saban. He wrote:

A good friend of my family works as a sales rep for Pfizer. She told us that on or around December 18th, the company will notify its entire US sales force if they are or are not being terminated VIA EMAIL. I am not interested in condemning Pfizer, per se, and I realize my information may not totally be accurate. However, this begs two questions, really.

First, are we to a point in our society that face-to-face delivery of bad news is so uncomfortable that is it being replaced by email (and probably text messages soon)? I suppose this is akin to the old pink slip, but termination notices by email, phone, or anything less than face-to-face are just completely dehumanizing to me.

Second, from a practical standpoint, how does a company notify a 10,000 person strong national sales force regarding who will stay and who will go? Email certainly makes this easy, cost-effective, and works out bugs in timing. But are there other methods that could possibly be as effective, yet be more respectful towards the people being cut?

Great questions, Nick, and eternal ones. By complete coincidence, I was killing time over the weekend watching some old English TV shows that I have on DVD (a 1991 episode of “Drop the Dead Donkey” to be exact) and the entire plot of this sitcom (!) was about a group of fellow-workers waiting to find out which of them were going to be fired as part of a cost-cutting program. (Great topic for a comedy, right?)

Different time, different country, different context —- same issue.

So, let’s accept Nick’s challenge. Let’s not debate whether large-scale layoffs are a good idea, fair, or anything else. Let’s address his question. If you know you’re going to have to lay off a large number of people, what’s the best way to do it? Short and sweet or slow and thoughtful? An email blast all at once or have everyone talk to their manager (which would take quite a bit of time)?

I actually think I can make a case for the virtues of the email approach. I once wrote that all business decisions contain a finite amount of pain, and you get to choose — either a lot of pain for a few people in a short period of time, or a little bit of pain for a larger group of people over a longer period of time. Guess which (in general) I would recommend? You got it — if you HAVE to choose, I think it’s better to get things over and done with as soon as possible. And if that means it has to be relatively impersonal, then that’s what it’s got to be.

The choices aren’t perfect. Of course we would all want to be more human and respectful. But leaving everyone in doubt as to whether they’re in or out isn’t very respectful, and it could take forever to arrange one-on-one’s for 10,000 people (or even just the 2,000 who are going to get the chop.) It’s the scale that causes the problem.

That’s one view. Anyone else want to offer a perspective on this tough managerial topic? If you have no choice but to layoff 2,000 people, is there a better way to do it?