Layoffs: What CEOs can learn from Airbnb’s Co-Founder/CEO Brian Chesky

On Tuesday May 5th, Airbnb Co-Founder and CEO Brian Chesky sent this letter to his entire company informing them of the sad news that nearly 1,900 teammates (25% of the company) will be leaving Airbnb. His letter is inspiring, human and brave. My wish is that every founder and CEO will follow his lead. I’ve outlined the key behaviors I found in Brian’s letter that CEOs can learn from and use as a guide.

Share good news and bad news. It’s imperative that employees hear regular updates from their CEO and leadership teams. The best way to do this is by holding regular all-hands and department meetings. Use this time to align to your company mission, clarify goals and answer questions.  Don’t use overly optimistic messaging. Instead, be as transparent as possible. I suggest sharing high-level financial and business performance data so everyone will have a basic understanding of where the business is and where it’s likely headed. Being transparent will create trust, and any cuts to budgets or a future layoff will not be as surprising. Follow Brian’s lead and when asked about layoffs respond consistently and explain that: “Nothing is off the table.” To quote Abraham Lincoln, “I am a firm believer in the people. If given the truth, they can be depended upon to meet any national crisis. The great point is to bring them the real facts.”

Face the hard truths and create a focused business strategy. Like Airbnb, your company is likely being impacted negatively by COVID-19. Airbnb has two hard truths to reconcile: 1) They don’t know exactly when travel will return, and 2) When travel does return, it will look different. Human behavior has changed and the world that existed before COVID-19 is in the past. Businesses need to determine their hard truths. The first step is to realign your company to its mission. Brian says it best in his letter: “This crisis has sharpened our focus to get back to our roots, back to the basics, back to what is truly special about Airbnb.” For Airbnb, the mission is centered on human connection and belonging. The next steps are to determine what strategy best supports your mission, and what fundamental changes need to be made to support that strategy. Reduce the time and cash spent on anything that does not directly support your mission.

Share your decision-making process. Respected leaders throughout America are providing context and step-by-step guidance on how decisions are being made to ensure the health and safety of our cities, hospitals and schools. I encourage you to show the same transparency. Now is the best time to exercise your company’s core values and model behaviors you admire. Brian and his team at Airbnb used their core values to create guiding principles for making decisions about their layoff.

Every layoff should follow these principles:

  • Commit to diversity and inclusion
  • Map skills and capabilities to your new business strategy
  • Provide a fair, valuable and human severance package 
  • Meet with every affected employee one-on-one 
  • Have answers to the important questions before communicating

Even if your company isn’t currently facing a reduction in force, you should create a set of guiding principles for how you’re going to make short-term and long-term strategic decisions. 

Take care of your employees. People are your company’s biggest asset. It takes a lot of money, time and energy to hire and train high-performing teams. It takes just as much effort to build your company culture, employer brand and reputation. If your company isn’t facing a layoff, now is the time to start looking at your numbers and working backwards. If the time comes that you do have to perform a layoff, make sure you can offer a severance package that supports your employees, culture and reputation. When making layoff decisions, create a fair process following all state, federal and local laws. Consider offering non-traditional items in severance packages, such as mental health benefits, job search support through alumni networks, career services or letting employees keep their laptops.

Be thoughtful, clear and concise during a layoff. Provide information with as much clarity as possible. Describe the process and when each step will be taken. Leadership should be trained and equipped to meet with every affected employee one-on-one on the same day as the announcement. Have paperwork, severance packages and other benefits ready. Give affected employees time to say goodbye and keep the employees who are staying informed. Once you’ve finished meeting with employees whose jobs were eliminated, meet with every employee that is staying. Many leaders underestimate how much work, time and energy is required after a layoff. Many employees who remain at your company will need additional support to adjust to the new reality. Now is the time to share the details of the new business strategy and empower employees to rally around your mission.

Be human. Share your thoughts. What’s important to you? What has COVID-19 taught you? Most importantly, share your feelings. Your employees, board members and community members want to connect with you. Airbnb’s Brian Chesky didn’t hold back and captured the hearts of many when he wrote, “I have a deep feeling of love for all of you. Our mission is not merely about travel. When we started Airbnb, our original tagline was, ‘Travel like a human’. The human part was always more important than the travel part. What we are about is belonging, and at the center of belonging is love.’” This crisis requires new leadership; leadership that is vulnerable and courageous. 

“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat,” (Theodore Roosevelt, 1910).

My consulting company partners with leaders at startups and publicly-traded companies to align their mission, strategy, business operations, HR teams and culture. For more information you can email hello@shannonflynn.co

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