If you have a Twitter account, chances are you’ve seen the backlash from employees who were among the widespread layoffs last week via a robotic-type internal memo. But recent weeks have shown that not all layoffs are created equal. In fact, digital payment provider Stripe showed on Friday that there is a much more humane way to deliver bad news.
Stripe Inc., a startup founded by brothers John and Patrick Collison, announced on Nov. 3 that it is laying off 14% of its staff. In its latest funding round, Stripe was valued at $95 billion.
Patrick, who serves as CEO, sent an email to employees explaining the situation. He wrote, in part: We, the founders, made this decision. We over-hire for the world we’re in, and it pains us that we can’t deliver the experience we hoped those affected would have at Stripe.”
Collison’s email to employees, from start to finish, was highly effective, Lars Schmidt, founder of human resources recruiting firm Amplify, told me. “Getting laid off at any time is hard, while we’re still in a global pandemic, possibly going into a recession, and right before the holidays, that’s really hard,” says Schmidt, former senior director of talent at NPR and vice president of human resources. . at Ticketmaster.
Schmidt pointed to five critical elements that made Collison’s message successful:
–Responsibility from the point of view of leadership. Collison emphasized: “We made some mistakes,” says Schmidt. “’We made some wrong decisions.’ I just think that’s real leadership. You’re not just blaming a falling market.”
–Clarity about outputs and benefits. “There is no one good way to do a firing, but we will do our best to treat everyone leaving with the greatest respect possible and do everything we can to help,” Collison wrote. That includes the following benefits for employees who leave: 14 weeks of severance pay; an annual bonus of 2022; a payment for all unused PTO time; the cash equivalent of six months of existing health care premiums or continued health care; accelerate everyone who has already reached their one-year award cap to the February 2023 award date; professional support and discounts from Stripe for anyone who wants to start their own business; and immigration support for visa holders.
“The clarity that he provided proactively answered a lot of questions that people would have right away,” says Schmidt.
–An open line of communication.. “We will be setting up live, one-on-one conversations between each departing employee and a Stripe manager over the course of the next day,” Collison wrote.
Rather, “we’ve seen horror stories of CEOs firing hundreds of employees over Zoom,” says Schmidt.
–Looking to the future. “We want everyone who is leaving to know that we care about you as former colleagues and appreciate all you have done for Stripe,” Collison wrote. “In our minds, you are valued alumni.” Stripe is creating alumni.stripe.com email addresses for everyone leaving. “In addition to the headcount changes outlined above (which will bring us back to our February headcount of nearly 7,000 people), we are tightly controlling all other cost sources.”
“Collison addressed how they’re going to make some changes going forward,” says Schmidt.
–Empathy. “These are humans,” says Schmidt. Showing no genuine concern, “the employees who stay are wondering: Is there no heart in this decision? If you’re a CEO who isn’t particularly empathetic, you want to make sure you have good people reviewing your message for tone.”
Over the course of 2020 and 2021, business was booming for Stripe. “We transitioned to a new operating mode, and since then both our revenue and payment volume have grown more than 3x,” Collison wrote in the Nov. 3 email. But as early as April, Stripe signaled in an open letter that the macroeconomic hurdles of 2022 would be upon us. The company handled more than $640 billion in payments in 2021, an increase of 60% year over year. Brother Collison warned: “Since much of this came from one-time behavioral adjustments caused by the pandemic, 2022 will not reach the same level of growth.”
Schmidt has been taking note of how tech companies are laying off employees. “When I saw Patrick’s email, it actually reminded me of an email that Brian Chesky, CEO of Airbnb, sent to employees in the early days of the pandemic,” Schmidt explains. “At the time, I thought that was the best message I had ever seen regarding layoffs. The common points that both had is that they take possession”.
In light of recent layoffs in the tech sector, Schmidt has created a popular thread on LinkedIn with posts from companies that are hiring. Although there are less than two months left in 2022, there could be more layoffs before we ring in the new year.
See you tomorrow.
Sheryl Estrada
[email protected]
what a thing
“The CFO Choice Paradox,” a recent Accenture report, examines the need to reinvent the business, with CFOs at the forefront of this accelerating transformation. Sixty-eight percent of CFOs surveyed said their organizations are focused on three or more transformation initiatives at the same time. For example, 57% of CFOs are driving sustainability transformation, along with workforce transformation (52%) and digital transformation (50%). However, more than half (67%) of those surveyed said they sometimes feel paralyzed by the number of decisions and the volume of choices they have to make. “The key is to create balance and empower a talented team,” according to the report.
going deeper
“How to Get the Most Out of Your Customer Data,” in Wharton’s Business Magazine, includes an interview with the co-authors of the book “The Audit of Your Customer Base,” published this month. The co-authors discuss why companies cannot make fully informed decisions without first understanding their customers’ buying behavior and the actual health of their customer base.
leaderboard
brian hoff, CFO of Auddia Inc. (Nasdaq: AUUD), a developer of a proprietary AI platform for podcasts, is stepping down from the role he held since April 2021. Hoff is leaving to join a private equity-backed manufacturing company, as CFO, According to Audia. The company’s board of directors approved an outside firm to support financial reporting and serve as fractional CFO upon Hoff’s departure. They also launched a formal search to identify a new CFO.
Sonja Theisen was appointed CFO of Pathward Financial, Inc. (Nasdaq: CASH). Theisen, 41, will succeed Glen W. Herrick, 60, as chief financial officer, effective April 30, 2023. Theisen, who joined Pathward in 2013, has held leadership roles across the organization, including chief accounting officer, chief of staff and EVP, governance, risk and compliance. Prior to joining the company, Theisen held finance and accounting roles at Great Western Bank, Eide Bailly and KPMG.
overheard
“The people of Twitter past and present are strong and resilient. They will always find a way, no matter how difficult the moment is. I realize that many are angry with me. I am responsible for why everyone is in this situation: I did growing the size of the company too quickly. I apologize for that.”
— Jack Dorsey, the Twitter co-founder who ran the company until November 2021, apologized in a tweet on Saturday to workers who were laid off when his friend Elon Musk took control of the company last week, Fortune informed.
