Employee Care in a Tough Economy

A recent e-mail exchange about employee-customer care with fellow blogger Susan Cartier Liebel inspired this post. Susan wrote: “If you don’t take care of employees, it’s a bad mistake. I wonder how that will apply in today’s economy given what is going on?”

During this economic meltdown, I believe most companies need to take extra special care of their employees if the business wants to hang on to its customers. Unfortunately, some firms will follow a “slash & burn” approach to human resources, especially those who view their employees as dispensable commodities.

“Breaking Up is Hard to Do

For those who have to downsize, the difference is in how gently they let their people go – with appropriate closure (such as severance and outplacement support) vs. the “don’t-let-the-door-hit-you-on-the-way-out” dismissal.

What’s frightening to me is that even successful companies aren’t immune to downsizing – including Zappos.com, the company I recently showcased in this blog. Describing this difficult decision, CEO Tony Hsieh acknowledged, “Given our family culture, our layoffs are much tougher emotionally than they would be at many other companies.”

Zappos offered severance (which not all companies do) in addition to assistance with health care coverage to those affected. According to Hsieh, “By doing all of this to take care of laid-off employees, we expect that it will actually increase, not decrease, our costs for 2008, but we feel this is the right thing to do for our employees.”

Letting people go is never easy. But executives in this position need to keep in mind that everyone affected by the decision to downsize – including those laid-off, the surviving employees, AND the customers – will remember how well or how poorly the situation was handled.


  • Sybil December 16, 2008 Reply

    CV, thanks for your comment and sharing your blog link about Zappos’ layoffs. Great post! I really like your Authentic Organizations blog and will add it to my blogroll.

  • CV Harquail December 9, 2008 Reply

    Sybil, and Sarah-
    I’ve got to respectfully disagree.
    I think that Hsieh’s explanations of the Zappos layoffs were mostly platitudes, and they reflected an inauthentic leadership approach.
    Hsieh fired 130 employees while commenting how well Zappos was acutally doing. He also chose to fire the customer service reps with longer tenure– the ones who made $16/hr — while keeping the newest hires — the ones making $10/hr. This in a company that, he claims, is all about family? That’s kind of like leaving Grandma in the woods, and driving off fast.
    The only nice thing Zappos did was give the fired workers some severance (actually a *common* practice). Two months severance is the equivalent of waving goodbye to Grandma, and tossing her a bagel. That should help a lot.
    yes, this is a cranky comment- I’m just getting tired of seeing Hsieh and other celebrity CEOs like him getting lauded for what should have been avoidable actions. See my posts on http://www.AuthenticOrganizations.com . … You’ll like the one “If Stephen Colbert Were the Ceo of Zappos: Explaining a layoff to your employees”.

  • Susan Cartier Liebel December 9, 2008 Reply

    Sybil, I couldn’t agree with you more. It is hard when companies get into ‘survival’ mode. They are reacting in the moment and fail to consider the future of their business and those who have served them well. Now more than ever, they need to show the necessary ‘humanness’ which goes beyond business, too.
    For companies and large law firms, ‘internal marketing’ is an important component which shouldn’t be neglected.

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