How to Be An Accountable Leader During an Age of Layoffs If you are a leader, you eat last. Here's how to lead by example during economic uncertainty.
By Tal Frankfurt Edited by Micah Zimmerman
Opinions expressed by Entrepreneur contributors are their own.
The tech industry's rapid growth during the pandemic has reached a sobering reckoning. In 2022, over 1,000 tech companies laid off nearly 155,000 people worldwide. 2023 has continued this trend of mass downsizing and financial recalibration, with over 100 global companies laying off another 37,000+ people as of mid-January.
Unfortunately, this trend will continue as the '23 layoff totals track to exceed 2022. However demoralizing and precarious the age of layoffs might be, it presents a valuable learning lesson for the industry and, more specifically, the CEOs faced with these tough decisions.
Related: Layoffs Affecting 1,600 Tech Workers A Day on Average In 2023
Learn from experience
I believe that true learning can only be achieved when you attempt to do something you've never done before. The need for quick action and accelerated adoption of new technologies and work methodologies due to an unprecedented pandemic kicked many companies into a hiring frenzy.
Should the CEOs of these companies be slapped on the wrist for overhiring now that we know many of those hires would be let go within 2-3 years? I think the more realistic point of view is to judge these CEOs on their actions and attitudes toward accountability now that these hard truths have turned into brutal realities for so many.
Related: Leadership Is Learned From Experience, Mentoring and Failure
Compare and contrast the post-layoff demeanors of Twitter CEO Elon Musk with Salesforce CEO Marc Benioff, for example. After Musk took over Twitter in October of 2022, the new head honcho promptly laid off nearly 50% of Twitter staff, well over 3,000 people. Following these layoffs, Musk managed to get on the bad side of what seemed like all retained employees, advertisers, business partners and the general public through a litany of tone-deaf and ill-advised comments made in the wake of his organizational changes. Tesla stock has plummeted since Musk's interest in buying Twitter was first announced, and his public approval rating has never been lower due in part to his indifferent handling of Twitter staff.
When Salesforce laid off approximately 8,000 people, 10% of its staff, at the start of 2023, CEO Marc Benioff took a decidedly less abrasive approach to handle the aftermath. In a letter sent to Salesforce staff following the decision, Benioff took responsibility for the over-hiring through the pandemic, ensured those affected by the layoffs would receive a minimum of five months' pay and offered compassion and leadership to help get through the difficult moment. Everything rolls up to the CEO, and a true leader worth following will remain accountable and open to learning during these moments.
Related: The Vicious Cycle Of Overhiring And Layoffs
Lead by example
One of the many things I learned while serving in the army is that leaders eat last. When one takes on the role of leader, whether a general or a CEO, the success of your leadership is predicated on the commitment you make to those you lead. Taking this comparison a step further, if you want to be the leader presenting medals of honor to your soldiers, you must also be willing to be the leader that notifies the families of soldiers injured or lost.
There are lessons to be gleaned from the current age of layoffs and how those in charge take — or avoid — accountability. Perhaps your company feels the effects of this wave of layoffs or is preparing to make similarly difficult decisions. Consider the "how" in addition to the "who." Think about the standard you set for not only the people that remain at the company but for the people you grew to know and support that have also moved on.
Related: 3 Things to Do When Layoffs Are Looming
Look to improve
Perpetual learning and curiosity are core values of my company, which I consider an extension of myself and my own personal values. When I look back on moments that challenged me and my company and consider the decisions that helped me confront those challenges, I see that authentic learning happens when you do something you're not already good at.
Whether your company is experiencing record profits or preparing for reductions, gathering feedback from staff must be a perpetual priority. Conduct staff surveys on an annual basis, prioritize check-ins and keep streams of communication open. The key to bettering your company lies with your people. It is better to hear hard truths than to project a false sense of security.
You won't progress yourself or grow your company without taking risks and facing challenges head-on. Having the accountability to step up as a leader and acknowledge when things don't go as you'd prefer is a foundational cornerstone of any effective CEO, regardless of industry.
