The Indian startup ecosystem has been a fragile one these last few years. It started like a breath of fresh air before conversations became just about revenue and scale. Several me-too startups, especially in food tech and online services, got funded like there is no tomorrow. But as the pressure to become profitable increased, these me-too startups resorted to the quickest and easiest solution to bump up the bottom lines – mass-scale firings. In the last two years alone, known startup brands – such as Snapdeal, Proptiger, Ola, Flipkart, and Zomato – have tried to save their businesses using this route. Given the economic climate around the world and the dynamic nature of the startup ecosystem in India, large-scale firings are unfortunate but often needed to keep businesses afloat.
Often organisations focus on the “strategic reinvestment” and “organisation-wide restructuring” side of the story, failing to address the human side of these mass layoffs. Whatever might be the reason, the crux of the matter is that it leaves hundreds of mid-level employees in the lurch, often for no fault of theirs. It also creates an environment of uncertainty and fear in the colleagues who escaped the proverbial boot. This insecurity further pushes mass-scale exodus in several organisations.
Large-scale firing impacts employee morale like little else. Here are some ways startups can maintain a semblance of positivity in their teams amidst such testing times:
Things will change
If you are firing your existing employees’ work friends and colleagues, don’t expect business as usual. Morale will go down and productivity will suffer. Since startups mostly function as close-knit units, grappling with the news can take some time. Be a little forgiving, this is a human reaction. Trying to control it and expecting your employees to be the cogs of a wheel that must keep turning, no matter what, is only going to make things worse.
If someone from the team is upset and needs to vent, it is best to be objective about it, just like you expect objectivity and understanding from the fired and existing employees. Don’t take these reactions personally, and try your best to have dialogues in order to assuage the newfound insecurity among your workforce.
Openness and transparency go a long way
Employees often find out about mass-scale firings through Chinese Whispers by the coffee machine, or worse, in news headlines as they start their day. It would be better if founders connected with their employees authentically and genuinely and explained the reasons for their decision in as many words. Drop the corporate banality here if you want to be credible in these conversations. It is also important that you inform team leads and managers about potential repercussions on their teams so that everyone has a backup plan and isn’t caught by surprise.
Often mid-level and junior employees have no visibility into what drives their employer’s bottom lines. If leaders can communicate what makes money and what doesn’t, there will be more clarity and reassurance amongst your teams. Even as founders and leaders focus on broad business strategy in these conversations, it is important that they communicate ground realities of their financial strength for those who don’t have visibility into it.
One of the most significant challenges in the face of large-scale layoffs is the chances of existing employees spilling the beans and venting their angst on social media. This gets worse when they feel like they are not being heard. To avoid potential public lash outs, founders and leaders should open channels of communication and answer all questions that come their way. This way, your existing employees will be reassured that someone is listening and be more open to having a conversation with you about the company’s state of affairs, instead of speculating on social media.
Engage your people managers
Apart from leaders, people managers too have a crucial role to play in the face of uncertainties and firings. Most of your employees trust their immediate supervisors more than the C-suite. It is important that your managers are able to mirror your message of stability and have clear plans on how the team’s goalposts shift in such times. Individual career progression plans come in handy at such times, as your existing employees will see it as a signal of safety and certainty as far as their individual roles are concerned.
For startup employees, especially, mass-scale firings can be extremely disturbing. They signed up for the job because most likely they believed in the vision and mission of the startup. It is crucial for Indian startup founders to remember this when they plan their restructuring. Minimize the damage as much as you can – you owe it to your employees, in return for their partnership with you over the years.
Read Also: Five easy ways to boost employee morale