How Preemptive Layoffs and Rescinded Job Offers Destroy a Company From the Inside

It’s not just the loss of trust, it’s the fact that the damage festers in the shadows

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Times of economic crisis call for drastic measures. Any good leader knows this, and any good leader knows that those measures will be painful and will inevitably impact the long-term future of the company.

But there’s a limit. Preemptively right-sizing a workforce and rescinding job offers goes over that limit.

I get it. Millions of dollars in pandemic-recovery overspend. Overly optimistic projections. Short runways. Angry investors. Inflation. Supply chain. I get all of it.

I’m not here to judge. I’ve been on both sides of this issue, over two decades of leading and advising startups and tech companies. So I’m just here to tell you what’s likely to happen in the long run, based on my experience.

Reducing Workforce Is (Mostly) an Accepted Corrective Measure

The truth about layoffs — and it’s a truth that employers count on — is that the employees will usually understand and accept why they’re being let go. In fact, they almost always come to grips with it as a necessary broken rung on the…