Five lessons for CEOs from Better .com episode

Highlights 

• Better.com CEO’s embarrassing action and the consequent slamming has registered a new chapter in the corporate world.
• The dramatic affair of Better.com is now being used as an example by others to learn ‘how a CEO must not handle a sensitive situation’.
• Senior employees must ensure that news of job cuts is not conveyed as a rude awakening to the employees.
• It is only ethical to sign off your serving employee with an expression of gratitude.

“The right mortgage could save you thousands,” says Better.com. However, recent episode at the digital mortgage firm ascertains that one wrong move, especially if recorded, is enough to cause irreparable damage.

Better.com Chief Executive Officer (CEO) Vishal Garg fired 900 employees, around 9% of the company's workforce, on a Zoom call recently. What followed next was a lot of negative publicity on social media and other platforms across the web.

After the incident, Garg received intense criticism from people across the globe, including some of the top global leaders. While he has apologised for having blundered the execution of communicating the layoffs, it seems that it’s too late to mend the fault. The damage has been done.

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Interesting Read: 7 financial lessons from Netflix’s Squid Game

So, let’s not wait for another unfortunate episode. Having learnt a lesson from the one mentioned above, we have corroborated a list of tips to follow as a leader of a firm and avoid causing a blunder while announcing layoffs.

Be empathetic
Be it temporary suspension or permanent termination for business reasons or as part of downsizing the firm, the employer must understand the emotional state of the employee. The news of losing one’s job can hit a person hard as, in most cases, layoffs adversely affect families and their livelihood. So, leadership must ensure that it’s not conveyed as a rude awakening to the employees.

Plan it well
Any announcement that is bound to impact many lives must be planned well in advance to ensure its smooth landing. And when it’s about a massive downsizing, management must be extra cautious about its time of announcement and the way of conveying the management’s decision. 

Express gratitude
A firm’s call to carry out layoffs can be based on multiple reasons. However, it is only ethical to sign off your serving employee with an expression of gratitude. Be it for a month or a decade, the outgoing employee must be thanked and respected for his/her contribution to the firm. The news of job cuts should be communicated to the affected employees with a lot of gratitude.

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Be future positive
Letting go of your good human resource due to uncertain times and adverse conditions can be a major setback for the management and the company, in general. However, there always stands a chance to cross the path again in better times. Bidding them farewell on a good note leaves scope for bringing them back to the firm when the situation improves.

Build trust
It is often seen that after a company announces layoffs, several other employees tender their resignations, assuming that the firm is not in a stable capital position. The management of the firm and its leadership must come forward to clearly state the reason for layoffs and clear the air, even if it is a financial crisis. This strengthens the trust of the retained employees in the firm and validates the decision taken.  

Bottom Line                                                                                                                                       

The dramatic affair of Better.com is now being used as an example by others to learn ‘how a CEO must not handle a sensitive situation’. The above-mentioned tips will help you in better handling of layoffs and save yourself from brutal backlash. 

Also read: Is Workforce Immune to Layoff? Three Waves of Layoff Amid COVID 19