Airbnb delivers a masterclass in laying off employees with dignity

Layoffs are sometimes inevitable. Causing undue stress and instability doesn’t have to be.

COVID-19 has changed the way we do most things these days, but few sectors have been impacted as much as the travel industry. Part of that recent fallout includes Airbnb laying off 1,900 employees, or twenty-five percent of its workforce.

Layoffs are one of the most difficult aspects of running a business. If handled well, the released employees leave with their dignity intact, and those who stay maintain a feeling of stability and trust of their employer. And if handled like Airbnb, your company will likely have even more brand ambassadors at the end of the process than at the beginning.

Ten lessons from Airbnb’s May 5th letter to employees:

  1. Be honest, even when the news is hard. Airbnb co-founder and CEO Brian Chesky previously informed that all options would remain on the table as the company navigated the economic crisis. If there is any possibility you may have layoffs, do not suggest otherwise. Result:When you avoid setting up unreasonable expectations, you’re able to keep your word and maintain employees’ trust.
  2. Show compassion. Chesky clearly articulates this is a difficult decision for the company, and he acknowledges the even greater pain felt by employees — both those being released and those that remain. After all, individual lives and livelihoods are impacted. Result: Demonstrating that you care engenders trust and credibility. Until your team feels your compassion and empathy, nothing else you say will cut through.
  3. Be transparent about how major decisions were made. People want to believe that if their employer lets them go, it is for good reason and a last resort. Chesky’s letter explains, step by step, how he and his team made decisions, all guided by Airbnb’s core values. Result: Showing your employees the purpose and process behind the decision will engender trust that the folks at the wheel are making hard decisions responsibly and thoughtfully. And it helps those that remain trust that the company will treat them fairly, too.
  4. Be clear about how this major event will materially affect the business going forward. Chesky summarizes how the travel business, and Airbnb’s role in it, has changed. When the larger business landscape goes through drastic changes, your business must evolve or risk extinction. Explain the major changes ahead. Result: This greatly reduces the feeling of uncertainty and provides an honest reference for their inevitable chorus of whys.
  5. Talk to a companywide audience. Airbnb shared their news with all employees worldwide, and then the world at large. Chesky is transparent about the hurdles the business is facing and how that will affect employees. The letter also acknowledges that making major reductions in force doesn’t just affect those who were let go. Those who remain have a new level of uncertainty — their jobs may change as they take on someone else’s function, shifts in the business may change how they fulfill their previous roles, or they may expect to be in a future round of layoffs. Result: Openness invites openness, and thus engenders positive, team-focused attitudes. Fostering this type of culture helps everyone move through a trying time and adapt to new realities. Working through change takes effort and mental energy, so avoid hindering that with silence or lack of openness.
  6. Make it clear this is not a reflection of their work. Chesky takes the time to explain Airbnb’s strategy for preserving the business, elaborating on which areas will change and how. He also emphasizes that their decisions were not a reflection of the work done by teams associated with the business areas being reduced, nor did it mean everyone on those teams would be let go. Result: This gives your employees something to lean into. Employees who stay need a firm foundation from which to work. Showing care was taken to ensure those who remain are set up for success within the new framework can fuel employees’ confidence in pressing on.
  7. Offer severance benefits based on need and communicate them with everyone. Chesky and his team carefully considered the range of departure benefits for those who were let go. They focused on severance pay, equity, healthcare, and support for job searching, including allowing those laid off to keep their laptops. By retaining equity, they will still have a stake in the success of the company they have helped create. By offering health coverage, including mental health options, a critical need is met during the transition. Lending job search support gives former employees greater opportunity to find new work — and the technology to facilitate that outcome. Result: Offering a combination of compensation and support for their health and well-being sets departing employees up for success. And by sharing a rundown with everyone, the remaining team members know you treat your employees fairly.
  8. Clearly communicate next steps. Chesky’s detailed letter was distributed to all employees promptly after decisions were made and plans outlined. The letter honestly acknowledges to employees how meticulously the reductions in force will be handled given the complexity of the company structure and the relevant international laws. Employees are also forewarned of the coming meetings so individuals are not caught by surprise. In swiftly explaining how employees will learn about their future, the letter helps turn a cloud of questions into a vision of what’s ahead. Result: Providing clarity about the road ahead keeps your people and your business moving forward, and those who were let go start planning for a new future.
  9. Arrange one-on-one conversations with departing employees. Airbnb gave each employee the courtesy of setting up a one-on-one meeting to hear the hard news. Each was allowed the dignity of an honest, private reaction, closing down their function, packing up their own things, and saying goodbye. Result: Those leaving (and those staying on board) feel valued as individuals rather than dehumanized.
  10. Be swift and transparent with those whose jobs will change. Airbnb moved quickly to prepare employees who will be taking on new responsibilities. The letter gives a heads up about conversations to come — down to the subject line of the calendar invite they will receive to reduce unsteady feelings. The straightforward information in the letter gives employees facts on which to base their expectations, which serves to quell rumors and speculation. Employees are also given time to process, opportunities to discuss the situation within their teams, and the courtesy of a follow-up CEO Q&A to address remaining questions. Result: Eliminating uncertainty helps minimize anxiety in an enormously trying time. This goes a long way to reassure those still employed and acknowledges the stress and challenges ahead.

Above all, stay human. Chesky’s letter closes with a gesture of gratitude to all and a heartfelt apology to those impacted. He maintains a human, emotional tone that never slights the gravity of the situation. Without a doubt, the Airbnb letter provides a comprehensive model for handling layoffs based on respect, courtesy, dignity, gratitude, transparency, and inspiration — terrific leadership qualities no matter the situation.

If the above list seems daunting, here is a simpler way to understand how to be of greatest service to your employees — and therefore to your business — during uncertain times. All employees need four things from company leadership:

— Compassion
— Trustworthiness
— Stability
— Hope

This type of leadership creates a secure, focused, forward-looking environment for your team — even during layoffs — and it helps your company’s bottom line. Of course, this type of endeavor requires investment of management’s time, but the cost benefit is that your team will be less distracted and anxious. They’ll be able to focus their energy on their roles and be more apt to follow leadership. They’ll be more likely to believe in what they’re working toward, which can lead to less turnover and distraction following layoffs. And for those departing, transitions are more likely to go smoothly, causing fewer aftershocks.

And PS, lead with compassion, trustworthiness, stability, and hope during the good times, too. You will find it consistently brings out the best in people.