Layoffs: The Hardest Part of the Job

Layoffs are, without question, one of the worst experiences a founder will go through. Layoffs directly impact people’s lives—often people who were doing their jobs well. The worst part is that they often loved the work, the company, and their co-workers. For our purposes here, let's define a layoff as something that has nothing to do with performance. It’s the result of decisions you or your board or investors made, a business sale, or risks you took that didn’t work out. And if you’re a thoughtful and empathetic person, there should be some level of discomfort with this.

As bad as layoffs are, what you can do to mitigate the situation is to set a high standard for how they are managed. Sadly, in practice, it often isn't.

I’ve seen (and been part of) many layoffs —some handled with care and discipline, others poorly. The gap between the two is about attitude and preparation. Doing this well requires planning, coordination, and process.

There are a few areas that are really important.

First, the mechanics of the conversation. This should be planned carefully. The right people should be in the room—typically a senior leader and someone from HR. The message should be clear and brief. This is not a debate. It’s a difficult piece of information delivered quickly and directly.

At the same time, the experience needs to be humane. People need a moment to process what they’ve just heard. They need clarity on what happens next—when the layoff takes effect, when access ends, how they collect their belongings, and what the immediate steps are. I’ve seen situations where email access is cut off during the conversation. There are cases where that may be appropriate, but it should not be the default.

Second is what happens after the conversation.

If you can provide financial support—a severance package, extended healthcare—those matter. But just as important is whether you offer any practical help beyond that. Introductions, references, access to networks, or simple guidance can make a difference. Too often, this part is treated as optional.

Third is communication, both to the individual and to the rest of the organization.

People who remain will be watching closely. They will form a view not just of what happened, but how it happened. If the process feels impersonal or heartless, it affects trust across the company.

And don’t be fooled. The employee who is leaving will talk. The question is what they will say. You can’t change the fact that they were laid off. But you can influence how they describe the experience. If they walk away saying, “It was a difficult situation, but it was handled in a thoughtful and professional way,” that is outcome as you should aspire to for them, your team, and your culture.

The goal is not to make it feel good—it won’t. The goal is to do it well and with respect. Layoffs are oftentimes part of building a startup. But a poorly handled layoff should not be.