California-based electric scooter rental company Bird recently laid off 30% of its workforce at once over a live Zoom conference call, due to the financial impact of the coronavirus on the business.
It is reportedly the fastest start-up to have achieved a $1 billion valuation, also known as "unicorn" status, but its business has been ground to a halt by lockdown measures due to the pandemic.
Bird said that it turned off the video function on the call to protect privacy and instead a slide was projected outlining additional information about employees' pay and health-care benefits.
However, Bird's method attracted anger on social media. Founder Travis VanderZanden admitted its method was "not ideal" and that "in retrospect" the company should have made one-on-one calls over the course of a few days.
VanderZanden added that all managers had been asked to reach out to the affected employees following the call, to talk about the situation and that he had "personally been in contact with many."
But Bird is not the only company in the world to have been forced to either layoff employees or put them into retention schemes such as "furlough," where work is suspended but staff are still employed by a company.
Some 701,000 Americans lost their jobs in March, marking the first fall in payrolls in a decade, according to Labor Department statistics published on Friday.
Despite there being more businesses forced to have these difficult conversations, experts say there are ways to talk to employees to minimize stress in these situations.
Baseline stress
Dr. David Rock, CEO of leadership development company the NeuroLeadership Institute, said that in this current state of crisis workers' "baseline" level of stress is much higher than normal. Employers needed to be sensitive to this, he explained, as even smaller day-to-day problems can seem more stressful for many.
This is particularly important given the physical effect that stress has on the body, he added, as increased tension can raise cortisol hormone levels, increasing our heart rate and reducing our immune system function when we need it most.
Understanding the underlying causes of stress could therefore help employers handle difficult situations such as the prospect of unemployment or a pay cut, he suggested.
There are five senses of threat that humans experience that increase stress, he said — danger to a person's status, as well as their sense of certainty, control, connection with others and fairness.
These play out in nearly every interaction all through life and the brain is tracking these conditions constantly, Rock explained.
Employers risk attacking each of these senses at once, he warned, if they lay off an employee "in a way that is slightly cruel, which attacks their status and in a way that they didn't see coming, so there's uncertainty, and they have no recourse or control in anyway and they trust you (but) you do it unfairly."
When someone experiences all these senses of threat at once, he added, it becomes "unmanageable" and "overwhelming."
"And you don't want people experiencing an overwhelming threat, when they're already feeling threatened — it's not kind, it's not humane, it's not good for them, it's not good for you, it will result in lifelong enemies, who will harm your company in one way or another," Rock said.
Regain a sense of control
One way he recommended avoiding these feelings of anger and resentment was being as clear as possible with information when delivering the news to employees.
Giving employees options, depending on how flexible the company can be, can help them regain a sense of control, Rock pointed out. Offering the option of working their two-week notice period part-time over four weeks, is one method he suggested.
And while it can be hard to be fair when a business needs to let people go for its own survival, Rock said showing fairness in the process can be just as important to people as the outcome itself.
"There's research that shows people accept negative outcomes much more easily if it's shown that was a fair procedure used," he said, meaning that a company laying out the reasons for its decision can help someone process the news.
Businesses can protect their staff's sense of status by offering "glowing reports and fabulous references," where appropriate, he said.
"Mainly it's about bringing people back from being extremely upset to just upset," he said, but also warned against giving employees false optimism.
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