David Maister - Professional Business, Professional Life
David’s ResourcesAbout David
NEW! Browse my materials by topic of interest:StrategyManagingClient RelationsCareersGeneral

Passion, People and Principles

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?


Shaula Evans said:

David, while I’m afraid I don’t have answers (and I wish I did), I do have more related questions for you.

Large-scale layoffs obviously predate the use of email to layoff staff. For example, I was working as a telecom recruiter in Dallas, Texas in 2001 (great timing, I know), and when Nortel went into successive waves of massive global layoffs, I don’t ever recall hearing stories of layoffs by email 5 years ago.

The choice to inform staff of layoffs by email seems to be relatively new, even though email has been around as a standard corporate tool for some time.

What I’m wondering is:

– how were massive layoffs announced before email, and what methods worked best then? How do the cost/benefits of those methods compare to email announcements?

– given how long email has been around, why do stories of layoffs by email seem to be popping up for the first time recently? Why has email become the tool of choice now, and not earlier?

posted on December 5, 2006

Stephen Seckler said:

Getting the pain all over at once sounds like a good idea. But laying someone off by e-mail? Yikes! Can you imagine if the military notified family members of a death by e-mail?

Losing a job may not be as traumatic as death; but for some, it comes close. Yes it may take more resources and time for each laid off employee to be told in person that the company can no longer afford to employ that individual. But the investment is totally worth it. Think of the negative impact on morale when a company does something like this. Think of the impact that such a move might have on the reputation of the company when it competes for talent during the next boom.

posted on December 5, 2006

Mike said:


Back in the 90’s I had a neighbor who was an HR exec at a major oil company. He spent years doing nothing but mass RIFs. The standard procedure was to announce the reduction, fly to the location. Set up several rooms for HR folks to deliver the bad news, and start having managers bring people in to get the news. A second set of people were there to assist the RIF’d folks collect their things, fill out their final paperwork, and understand their transition options and resouces. It was a spirit-crushing machine. My neighbor looked like he aged 10 years in the three I knew him.

While I can see David’s point about shortening the general angst regarding the RIF, I cannot (to Stephen’s point) countenance leaving one of my staff alone for that terrible moment. They are people, and we owe them person-to-person support through that trauma.


posted on December 5, 2006

peter vajda said:

Perhaps standing back and looking at this from 50 miles out can shed light on another perspective, one that is all too prevalent in our IT-wrapped culture….namely, how the use of email, for example, allows one to be emotionally distant from others.

In all too many cases, folks play the “email card” and say it saves time, etc…which, in many cases, is true. On the other hand, one way to withdraw from real or potential emotionally sensitive situations is to distance one’s self from such interactions. Emailing in this type of situation is just another way, (some say new and creative), to uncouple themselves from honest relationships and honest, sincere and self-responsible face-to-face interactions. As the trend to uncouple continues, we find folks for whom just talking to others is frightening and having a confrointation, such as the one called for her, just downright impossible.

I’m surprised some of these companies don’t contract out to the ever-popular “breakup services” that help people split up from a boyfriend or girlfring, and just outsource this RIF task to one of these services.

More and more people are shying away from awkward conversations at work, at home and at play. So, to ease the pain, they decide to do it from a distance, electronically. where it’s “safe.”

So, to ease their own pain, they increase the other’s pain.

I’m curious as to how many of these organizations have words like honesty, integrity, compassion, etc. in their vision-mission statements and values lists. Hmmmm.

I wonder how many of these leaders/managers would respond to the question, “What’s right about “not” having, open, honest and sincere conversations with the folks I’m about to let go?”

Their responses will say a lot about folks’ character and about their take on “intengrity, yes, but only when convenient.”

posted on December 5, 2006

Eric Brown said:

During the time I spent managing/leading teams within Corporate America, I was involved in “laying off” 24 people from my team. Within the company, I was the only manager that would sit down with each person to tell them that they were no longer employed. Sure, I could have taken the easy road and let HR handle everything (like most other managers did), but I feel like the people that are let go deserve to have a few minutes to hear a respectful and honest communication about the reason that they are being let go. If a leader cannot spend a few minutes with the members of their team that are to be let go, then in my view, that person is not a leader.

Using email to communicate this type of message is irresponble and unprofessional IMO. Irregardless of how many people are involved, all communication of this sort should be handled via a face-to-face meeting. Is our society so adverse to experiencing human emotions that we must use technology to tell people that their lives have changed forever?

posted on December 5, 2006

Bob Worley said:

I am retired having worked 33 years in HR in a large financial institution. During the last 15 years of my career I was involved with RIF’s of well over 10,000 people due to merger or organizational changes. Every single one was done face to face with a manager and HR rep in support. And, every employee was treated with dignity and compassion and provided professional support to get through the transition and find other employment. A key aspect in how to do this relates to the organizational culture. If the company truly values its employees then it has to consider how the 8,000 remaining employees will view how the company treated those who lost their jobs. If handled poorly, then they could have a rapid exodus of some of their best employees who will go to company’s noted for treating their people better. It could also impact their ability to recruit good talent in the future.

Yes, it is stressful to deliver this kind of message but I learned a long time ago that it is not always considered as “bad news” by the recipient. Some people actually view this as an opportunity and most will eventually get to this point if it is handled properly. The top career transition/outplacement firms in the world are great resources to help a company develop and implement a plan to achieve it’s desired results.

posted on December 5, 2006

Charles H. Green said:

In my blog that you cited in your post (thanks), I suggested that Pfizer could use this as an opportunity to lead the way toward something sadly lacking in the pharmaceutical industry—a trusted advisor approach to the rep/physician relationship.

That relationships is a natural for trust—phsyicians need it, there’shigh value at stake, critical knowledge among the reps, etc. But the industry has drifted toward a competitive, self-serving, financial and short-term view of the relationship.

Your post makes it pretty clear that we shouldn’t hold our breath waiting for Pfizer to lead this particular parade. As everyone ahead of this has eloquently stated, this is a quintessentially impersonal and instrumental way of using people.

A firm that lays off key customer-interfacing employees by email is not likely to be the firm that leads the way in establishing trust-based relationships with its customers.

That opportunity is there; in an industry with a serious trust issue, whomever can re-frame the doctor/rep relationship to put the physician’s interests first will have a helluva competitive advantage.

But don’t look for it to come from Pfizer.

posted on December 5, 2006

Howard Krais said:

Any exercise which cuts the workforce, however major, affects not only those leaving but also those staying – in this case the 8,000 at Pfizer.

News that this programme is underway will mean that 10,000 people will be, to varying degrees, concerned about their futures, their careers, their mortgages, their families etc.

Even if they survive in their jobs (as most will do) not treating them with respect means the way they feel about the company they work for will be hugely negatively influenced. Perhaps the question then is more about how long the 8,000 will choose to want to work for Pfizer in the future.

Surely the role of managers includes being able to give bad news – and the role of the business (through the leadership/senior management, corporate communications, HR, training etc) is to help managers be able to give bad news whether through the tools they produce or techniques they can teach.

‘Downsizing’ is a part of our everyday business environment and I continue to retain a notion (however unrealistic) that people involved – both those staying as well as leaving – will be treated with respect by a management who understand and empathise with the implications of such a programme.

Does the scale of the programme in this case cause an added problem? Surely for a company with the resources of Pfizer, they should be able to plan this properly and coordinate announcements so people get the information properly. What could be more important?


posted on December 5, 2006

Coach Shweta said:

When announcing a large scale layoff, the best methods around these – definitely is the Email. You do not want to be in the agony of indecision if a compnay announces that 2000 would be in a layoff “soon” and the announcements come in small chunks. I find that to be the most ridiculous where the company is hurting it’s own productivity by having anxious workers who are discussing more time who would be on and so forth rather than working.

Tell all at once and that is what companies should be doing. But please plan it on more “sympathetic” approach, at least do not announce layoffs around the holidays time when families have plan for vacation and get togethers, how inhumane to announce a major layoff just before that to spoil it all. Can we not wait just 15 days more???

-Shweta, http://www.careerbright.com

Blog: http://careerbright.blogspot.com

posted on December 5, 2006

Ian Welsh said:

What Howard said. How you treat the people you lay off effects the people left behind. And you have to keep working with them every single day.

One of my uncles used to work in the contruction business. Hired, fired and laid off thousands over his career. He always said he had no respect for any manager who didn’t do his own firing and laying off.

“Oh, they all want to be heroes. They all want to announce the good news. But when it’s bad they’re nowhere to be seen.”

(Actually, insert some profanity and you’ll have a better idea of what he said.)

You get paid more as a manager or executive. One of your duties is to do the unpleasant stuff. Do it, or lose the respect of your employees.

posted on December 5, 2006

Tim Burrows said:

If I’m not mistaken, when Jim Collins researched “Built to Last” he chose Pfizer and Merck (from memory) as comparison companies (companies in similar markets, with similar origins).

Guess which one was the visionary company and which was the also ran? Guess which one has exhibited above average returns?

As an aside: Can you imagine what it would feel like to click the “Send” button on an e-mail like that?

posted on December 5, 2006

Chris McLaughlin said:

Given the company announced the layoffs and has provided the date on which the decision will be notified they have informed the entire workforce to be on notice that their jobs may be lost. If they then individually interview the workers on this date it would be a slow process with a lot of uncertainty from the workforce whilst it occurred.

If you let the entire workforce know whether they are still employed or not at the one time it reduces this uncertainty as the know what is going on.

I believe this strategy needs to be backed by HR/managerial interviews to those who lost their jobs so the decision can be discussed, as well as high levels of communication with those still employed to ensure they understand the reasoning behind the layoffs as a whole.

The major potential issue I can see with the layoffs by email is that of a “laid off ” email being sent to a worker who is actually staying, or a “staying” email being sent to a worker who was meant to be laid off. These errors can easily occur and in such a large workforce even a small percentage of errors could mean an incorrect email being sent. Face to face interviews wouldn’t have this issue as the paperwork can be checked prior to the interview commencing.

Currently my sisters whole office is in the process of being made redundant as they are moving the function to a different city. Some people are going at the end of December, others are going in June of next year. Only around half of the office has been told which tranche they will be in. Obviously most aren’t happy with being made redundant however for half of the people this is amplified because they don’t know exactly when it will occur, and this uncertainty is very stressful.

posted on December 5, 2006

Petri Darby said:

Or maybe it’s just time for companies that choose to treat their workforce in this fashion to be honest with their employees from the get-go and say :

“This is just a job. You should not take it personally. We don’t expect you to put your heart and soul into it. Nor do we expect you to care about your job outside of these walls. This is not a family. We aren’t going to treat you as though we were family. Your job may be eliminated at any time without explanation. And we think it’s a waste of time and money to talk to you if we decide to let you go, so if you receive an e-mail to this effect, you just need to pack up your desk and go home. This is not a conversation and this is an automatic message, so please don’t respond to this e-mail with questions or comments. Signed, The Management.”

posted on December 5, 2006

David (Maister) said:

Boy, I guess my attempt to argue the merits of the email approach didn’t find much support.

Steve Seckler above invited us to think about the metaphor of notifying families if a soldier has made the ultimate scarifice. Yes, Steve, in today’s world, the military can notify families one at a time, but come back to the scale issue.

Another DVD I watched over last weekend (I guess it was a goof-off weekend) was “Oh What a Lovely War”, a 1960s English satire about World War One. It pointed out that, as a single instance, at the Battle of the Somme, 60,000 British troops were killed on the first day(!!!) of the fighting.

How was notification handled back in those days? How do you notify 60,000 families (per day)? By publishing lists of the deceased in the newspapers!

I don’t say any of this to justify the practice of sending emails, and I am amazingly impressed at some of the real-world reporting in the comments above about how companies have done this (reasonably?) well.

This is tough stuff – and as we have said, is going to happen again and again. Learning to handle it is going to be in the future for many of us, if we haven’t faced it yet. I remember a manager of a hair salon, who I had invited to talk to my Harvard MBA students, say to them : “You’re not a manager until you’ve had to fire someone.”

True, true.

posted on December 5, 2006

david foster said:

This is inexcusable. The numbers of people may be large, but they aren’t a formless mass: they are presumably organized into areas, regions, branches, etc. The news should be given by the immediate manager of the person concerned *who should have been intimately involved in the decision as to who stays and who goes.* If this layoff was really done by mass email, it makes me wonder whether line management was really properly involved in the decision-making.

I’m a Pfizer shareholder, and if this story is true, then I would view it as a very negative indicator for the company’s outlook.

posted on December 6, 2006

Nick Saban said:

Thank you all for your comments. They all gave me reason to think.

Let’s hope we all don’t have to face this decsion too many times. However, I am saving this discussion just in case I do.



posted on December 6, 2006

Jason Alba said:

This is a great thread, I’ve enjoyed learning from the comments. I’ve not been involved in a big RIF but I was at a company that did move offices and most of the employees didn’t move. Weird environment, weird times.

I think that I would NOT mind an e-mail if I:

1. Understood that my job will change every 3 – 5 years. I’ve had to wake up and smell the coffee on this one, but now that I know that I do not count on a career with one company any more, and I think/hope that others are getting there.

2. Knew that the savings would somehow be passed along to me. For example, if you say “we’ll have a shoulder you can cry on or we’ll give you $500 if we can e-mail it to you”, I’d take the $500!!! Or, having them buy me access to something like Execunet.com, or JibberJobber.com or something like that (disclaimer: JibberJobber is my company) to help me put career management into perspective.

3. Knew that the e-mail was going to have specifics – for example, the terms of my termination, as well as contact info for various things I might not have considered. At my previously mentioned company we set up a website with lots of rich info to help people through the process.

4. Knew that I could come talk with someone – so it was still an open door policy, or perhaps a 1800 number or something like that.

5. Knew that my entire team, including the boss, and even bosses above that, were getting let go. Then who is there to talk to??

… I don’t know if I’m rare, or out of touch, but I can see both sides on this one and if the company sends more than a one or two sentence e-mail I can see it working ok.

Having said that, I’m guessing that this process will be perfected to the point that this is totally common (I already feel like it is).

posted on December 6, 2006

Ian Welsh said:

I don’t know how they did it in WW1 David, but I know today the US military tries to make sure every family finds out from a person.

posted on December 6, 2006

David (Maister) said:

Very honorable and proper.

I wonder if that’s true of other militaries? UK? Australia? Other nationalities represented on this blog?

Does anyone know?

posted on December 6, 2006

Steve Rucinski said:

I have been part of what may be an even more stunning layoff experience than email notification. In June of 2000 a company called Inacom (sales $2B or so) was unsuccessful in selling themselves and instead of filing Chapter 11 or something decided to terminate the business. There were several thousand employees at the time. We received an email that told us to call an 800 number at 4 pm. The message on the call was that the business was closed, leave your assets and leave the building. Business over and done.

Several of my employees were based at customer sites providing daily IT support. We were all stunned as employees, the customer impact hurt the whole large IT reseller image. Thousands of employees and customers were left with no direction and no explanation. Amazing.

In my past life at Digital Equipment we did many large layoffs with personal management notification, several thousand people globally sometimes. It was done because we thought it was the ‘right thing to do’ and we put in the planning effort to pull it off. Was it fun to do, no, was it necessary, yes.

posted on December 11, 2006

David (Maister) said:


posted on December 11, 2006