Layoffs should not be part of your PR strategy

When the first bubble burst back towards the end of 2001, I was forced to take a job that I didn’t want, running HR for a dying, publicly traded telecom company. My main accomplishment as Director of HR was the take the company from 240 employees to 75 employees, in order to get the company ready for merger.

I did this, and it was brutal. Many of the employees had been with the company for 10-15-20 years. It was an unhappy, depressing time, and the only reason I took the job was because it was the highest paying thing that I could find – which was important, as I had been working, unpaid on my startup for a year, trying to ride out the downturn.

I know layoffs.

What I’m seeing right now is sort of a celebration of layoffs. Kudos to the smart start-ups that are reducing burn and prolonging their runway, right? The case study goes something like this – the “brave” founder writes a heartfelt blog post (or makes a video) about the poor souls they have laid off, somewhere along the line taking full responsibility for the jobs that are being lost. Then TechCrunch is notified, the tweets are pushed out, and suddenly there is renewed buzz about the start-up.

I don’t have a problem with adjusting burn rates to meet revenue projections. Founders have a responsibility to their investors to maximize shareholder value. This can mean making hard decisions.

Where I have a problem is in those founders using these layoffs for link development, or as part of their PR strategy. You are not brave to lay people off. Calling it “burn reduction” or “runway extension” is masking the fact that you are taking away the livelihoods of those that hitched their wagons to yours. I think it’s even worse when some of these companies accompany their moves with boasts about having years of cash in the bank.

I don’t know the behind the scenes of what’s happening at companies like Mahalo, Seesmic, Gawker, and more. These companies are all run by smart guys, and the decision to lay people off was probably not taken likely. But I do know that the press outreach around these layoffs has seemed too enthusiastic for my taste, bordering on the crass.

Layoffs should be done compassionately, quietly, and with no fanfare.

Layoffs are nothing to celebrate.