The agency guide to laying off staff

Agency executives often sigh thankfully when reminded of the recession: “Thank goodness it’s over,” one told Digiday. “I break into cold sweats when I think about how many people I had to fire.”

But firing people is as much a fact of agency life as tattoo sleeves, sneaker collections and free beer on Fridays. Sure, things are lightyears better than they were between 2007 and 2009, when, according to BLS statistics, the U.S. ad industry cut 163,400 jobs. But the ad business — like construction and textile — is one of the most volatile industries. Accounts come and go, which means the people staffing them do the same.

“It’s part of a lot of business and industries, but it happens very differently in advertising,” said Patti Clifford, chief talent officer at Havas. “That’s because it’s driven by an event — either the coming on board of a client or a leaving of a client. Which makes it dramatic.”

Digiday spoke to chief talent officers, agency CEOs and co-founders and people who have been laid of to find the best possible ways for agencies to do the dirty work of cutting staff.

There’s no right time, really.
Let’s face it: Laying someone off is a hard conversation. When to do it is a matter for debate. One ad executive, who has lived through multiple layoffs at major agencies, said she prefers Friday, “so others don’t have the week to stare at empty desks and stew.” Clifford, however, said she’s not a fan of the Friday conversation. “Personally I feel, it sends people into the weekend with all their own thoughts.” Rick Webb, the founder of the Barbarian Group, said he prefers Mondays for “psychological reasons,” so people left behind feel like they can get back to work and finish the week. Meanwhile, one person who was personally laid off — twice — and now works at a New York agency, said she’s a fan of the Monday. “Any later and people start getting wind of it, and you can’t keep it under wraps.”

The same goes for time of day. A West Coast agency CEO said he would always do it in the mornings. That’s because it would give people time to pack their cars and leave and maybe still enjoy the day. “You owe them that.” Webb likes afternoons — mornings are “just too much,” around 1 or 2 p.m. It comes down to personal preferences and how well you read your workplace: If you’re the kind of agency where Fridays are “safe days” and people tend to cut loose, save the scary layoff conversation for Monday.

Bottom line: Pick the day and time that best fits your company culture.

Don’t dilly-dally.
The biggest mistake is waiting until the last possible moment to start letting go of people. One potential downside is that people find out they’re about to be cut. “Someone will always try to tell people because they know them or they’ve worked with them forever,” said Clifford. “People do it thinking they’re going to be the good guy. But it messes up the plan.”

Cut deep.
Webb advises against cutting shallowly, and instead to focus on the numbers — getting to 20 to 25 percent of the total compensation expenses. Because once it’s done, you want to be able to say, “it’s done” and “we don’t foresee another round” and actually believe it. “Just remove optimism,” said Webb.

Don’t be a jerk.
It comes down to respect, said Clifford. “There’s no need to bury them or walk them out of the building, at least in most cases.” Keep it civil, and keep it personal: The agency employee who was laid off twice said that the second time was a group layoff. “It was like a cattle call. It was terrible but kind of funny. I guess misery loves company, so it was nice we were in it together. But not the way to do it.”

The agency president said the discussion should be one-on-one, short and sweet and focus on a brief explanation of what was happening along with exit-package details.

Clifford added that you can build in some time for people to say goodbye to colleagues unless the conversation was unpleasant and the fired employee became unpredictable or too upset. Devries said that sometimes you want to let them know why they’re being let go, as long as you remain vague. “Don’t be too transparent,” she said. So if it’s about a drop in work, mention that, but don’t get specific. It can cause a silent panic button to get pressed.

Webb said to go one step further and “avoid reasons completely,” because reasons create legal problems.” And if you’re laying off people because of a big account loss, it’s not like you’ll definitely hire them if you win something equally big.

Do it in person but not alone.
Flying people out so people can be told in-person is worth it. “I hear people saying they can’t afford it. If you can’t afford it, you didn’t cut deep enough,” said Webb. Have a witness and a lawyer, he added. The witness is there to corroborate what you said; the lawyer is so you don’t get sued.

Watch out for extenuating circumstances.
One HR chief once had to fire someone who was literally carrying guns — totally legal, he had target practice later. “I was just looking at him and saying, ‘Oh my God, are we about to do this now?’”

Don’t talk about them after they are gone.
Once the layoffs are done, say, “It’s over,” then immediately call a meeting for the next day. Don’t talk about who was let go, or why. Instead, just say, “Here’s what’s next,” said Webb.

Homepage image courtesy Shutterstock

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