It is not unusual for companies to reduce their workforce in response to the impact a crisis is having or is expected to have on the organization. Because hundreds or thousands of jobs across the country or around the world may have to be eliminated immediately, business leaders may have no choice but to announce the bad news to employees via Zoom or other video platforms.
Although mass layoffs via video can be a quick, efficient and cost-effective way for companies, they can have important downsides that should be considered before moving forward. From a PR perspective, remote firings are regarded as a cold, impersonal and detached way to lay people off and can create additional crises for organizations.
On Tuesday, Carvana, an online used car dealer in the U.S., laid off 2,500 employees, many of them over Zoom. The laid-off workers, who the company said was mostly in “operational positions,” comprised about 12% of Carvana’s workforce.
“An email to employees from CEO Ernie Garcia reportedly blamed slower-than-expected growth. Carvana, which has struggled to maintain its early-pandemic success, reported a net loss of $260 million in the first quarter and its stock price is down more than 84% since the start of the year,” Protocol reported.
Since December, mortgage company Better has used Zoom three times to lay off workers. In a statement to Fast Company, it cited “ongoing instability in the mortgage environment” as the reason.
Challenges And Issues
Using Zoom and similar services can create a second crisis for organizations.
Because of how the workers were notified and what is said on the video calls, they can place businesses on the defensive and damage the credibility, image and reputation of CEOs and the organizations.
The videos “… can be recorded and kept by the former employee,” said Baruch Labunski, a reputation management expert and CEO of Rank Secure. “The former employee could then use it on social media, editing it to make the company or manager look bad. It could also be used in legal proceedings if the employee decided to sue the company,” he added.
Leaked copies of any video calls about the layoffs can add fuel to the fire and help lengthen the crisis or make it worse.
“Leaked video from a second meeting that Better.com held minutes after the now-infamous Zoom call in December when it terminated 900 employees, provides stunning new insight into the level of mismanagement that went into perhaps the most bungled corporate downsizing in recent memory,” Fast Company reported.
A third crisis could be created by the videos because of the impact they can have on company morale and the ability to retain or recruit employees.
An Added Layer Of Complexity
Firing people online could also create legal-related crises.
Employment attorney Omar Ochoa said “… firing over video conferencing, like Zoom, adds a layer of complexity because the company has to be aware of the laws in the employee’s specific location rather than just worrying about employment laws in the jurisdiction of the company’s headquarters.
“There may be specific laws regarding when termination can occur and whether any type of notice or process is required. Firing employees en masse over Zoom may seem more expedient to companies (even if it seems cold and impersonal to the public), but it can lead to lawsuits if the law is not followed,” he warned.
Advice For Business Leaders
- Employees could immediately post copies of the video on social media platforms.
- Do not say anything on the call that you would not want to be reported by news organizations.
- Take steps to ensure that the reasons for the layoffs are clearly understood by all those who are affected by the reduction of your workforce or who may learn about it later.
- This includes posting an official statement from the company on its website, and social media platforms and emails, distributing a press release and posting a video from a corporate spokesperson on YouTube.
- Be ready to immediately respond to any blowback about the video or why employees were fired.
- Prepare in advance key messages about the firings to use when responding to calls from the media, messages from remaining employees and criticism on social media.
- Conduct media training sessions before the video calls to ensure you are ready to respond to questions from reporters.
- Make yourself available to answer questions people and news organizations may have about the layoffs, and respond quickly to their inquiries.
- Immediately respond to any allegations or charges about the reasons for the layoffs.
- Seek advice or counsel from your internal or external PR and legal teams about potential issues related to firing people via video that may be unique to your company, organization or industry.
- The more you know about potential problems that can cause or exacerbate a layoff-related crisis for your company, the more prepared you can be to help mitigate or deal with it if it happens.