Anatomy of a layoff

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0:20At some point in our work lives, there is this experience that a lot of us will have. We'll get laid off. By one estimate, 40 percent of American workers get laid off at least once in their careers. And when that happens, there is this thing that companies often say. It's not personal, nothing to do with you or your performance. We're just changing priorities, making a strategic shift. It's the business version of it's not you, it's me. And just like a breakup, it feels terrible. And it can leave you with a lot of unresolved questions. Hello and welcome to Planet Money. I'm Amanda Aronchik. Today on the show, we are collaborating with a new podcast.

0:59It's called Proxy, and it's from our friend Yo-Ai Shah, who's formerly of NPR's Invisibilia. Yo-Ai's been documenting how a layoff affected one couple and left them searching for answers. And she helps them get those answers by taking their questions to someone who can give them the lowdown on layoffs.

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2:08Same goes for where you invest. Level up and invest smarter with Schwab. Get market insights, education, and human help when you need it. For the rest of this episode, we are handing the mic over to Yo-Ai Shah. She lost her job at NPR during a round of budget cuts, and it led her to this reporting. So last year, I met this couple who told me a layoff horror story. We're going to call them H and V. We're using their initials because the story we're telling is about their work, and they worry that sharing the story could affect their jobs. and we're also not going to say where they worked. So before the layoff, H and V were having a great year.

2:50They got married, recently bought a cute blue house with tan shutters. They felt like they'd achieved the American dream, something they thought they'd never get. They're both trans, both people of color. V is an immigrant. Look, we're not the Caitlyn Jenners of the trans world. We don't have, like, real status and real money. But as far as being able to attain something resembling comfortable, middle-class, dual-income, no-kids, transdom, like, hey, that's honestly, that's so good. I mean, isn't that the dream? After years of low-paying jobs and toiling in school for a master's degree, V finally landed his first good-paying, white-collar job.

3:35It was at the same company as H, and they really liked it there. Felt seen, supported. When H and V got married, their co-workers threw them this really sweet wedding shower with gold streamers and a West Elm gift certificate. I was actually quite moved, very surprised. I just never had anybody putting that much effort. This isn't like a family family, but it's kind of a family. It's like our work family. And then one morning last June, V's at the office at his desk. He's been there for a few years, so his cubicle has become a little home away from home. He's got photos of H, his cats, and one of the few photos he has of his mom that he really treasures.

4:16V has a fresh, hot cup of coffee. He's about to put the final touches on a video project when he gets an invite to a meeting. I asked my co-workers across from my desk, I was like, hey, did you guys get this invite for this meeting in person? Is this the business meeting that we have? And they were like, no, we didn't get that invite. I said, okay, let me go check out. It is what it is. V grabs his notebook and pen. He leaves his coffee. He'll be right back. He takes the stairs to the first floor and walks into the conference room near the front doors and security desk. And then I saw the boss of my boss's boss and the person from HR sitting in there.

4:58And I have a pain in my stomach. His first thought is that somebody complained about him using the men's restroom. So I sit down and I was expecting to speak about that. And I look at the head of the department and say, unfortunately, we had to let you go. And I was just like, wait, what? I don't understand. I had never had any complaints. I never heard anything from my manager. My feedback has always been very positive. I have worked above and beyond of what you guys asked for. and say, oh, it has nothing to do with your performance. We're just doing some budget cuts and you were on the list.

5:36And then the HR person say, yeah, unfortunately we had to let you go. And she smiled when she said it. She smiled like a very creepy, dead in the eyes smile. Honestly, I felt like I was being swallowed by a sinking hole. The chair was like going through the floor. I was so scared that I was going to have like a panic attack. V takes a deep breath, tells himself he's all right, he's all right, keep it together. So I say, okay, well, I need to go back to my desk. I need to finish this video. I want to tune it in. And they say, no, you're not now in the building anymore. And I was like, wait, what?

6:15But my stuff is there. Oh, yeah, somebody's packing your stuff right now. You don't have to worry about it. I feel like I had committed a crime and I had stole something. After what feels like an eternity, the HR rep comes back with a cardboard box with these stuff. I look at the box, and I saw my pictures were wet because whoever packed it dumped the cup of coffee that I was drinking and dumped all my stuff. A few pictures were completely destroyed, and my mom's picture was gone, and that was the only picture I had that didn't look professional like that. there's no copies of that picture anywhere and it's irreplaceable.

7:00V says the HR rep tells him he has 10 minutes to leave the building or they'll call security. He wants to scream but doesn't want to make a scene. He just dries off his things with a paper towel and packs everything into his backpack. H was working from home that day. He'd just gotten back from a doctor's appointment when he saw the text from V. when he got home, he came in the door and I just pulled him to a big hug. I held him and I told him things like, we will be okay, we're not going to lose the house, I can support us, it's going to be okay. So that's the first part of this layoff horror story.

7:45Now for the twist. A few weeks after the layoff, V is trying to recover, find a new routine. H is settling back in at the office. And then one day, he's catching up with a manager friend, and she tells him she has to lay someone off from her team in a few weeks. H starts to panic. I knew that layoffs happen in, like, waves. On one day, they'll lay off hundreds of people, which means that if I know for certain more layoffs are coming next month, for even one person in a different building, there's still a very strong possibility they are coming to my team, to my building. What if it's me? What if I'm next?

8:30H. Cess's co-worker even told him the day layoffs would happen. And over the next few weeks, H. becomes fixated on whether he's safe or not. He scours the pipeline of upcoming projects to see if things are slowing down. He scrutinizes every interaction with his boss. Was she being distant today? Why did she move their one-on-one to a different room and different time? Did you feel like a conspiracy theorist? Oh, absolutely. I felt like a conspiracy theorist, and I felt fixated. I just kept talking about it over and over and over. I kept talking about the signs and talking over the signs, and what do you think?

9:09Do you see the same thing? And I felt bad for my husband because I felt like I was potentially re-traumatizing him because I would not shut up about it.

9:23The day the layoffs were supposed to be coming, H really doesn't know what to expect. I called him that day to check in. Tell me what happened. Okay. So I went in and I actually packed up most of the things on my desk into a bag that I brought because I didn't want people touching my stuff. And it was like, look, all I have to do is just grab the bag. And then my grand boss or my big boss, she came by my desk while I was working and asked if I had a minute. I was like, oh, of course. And immediately I'm like, alarm bells are going off in my head. So she called me into her office and shut the door and she said, have a seat.

10:02H gripped his hands together because they were shaking. Then she said that my boss's position had been eliminated and she had been laid off, and I just felt, I do feel like I dodged a bullet. I feel like I was on a firing line and the squad missed me and hit the person next to me. It feels very surreal. And that is the layoff story of H and V. just kidding it was only the beginning because when you're the one going through a layoff you still have to deal with the layoff after the layoff try to recover there's a bunch of research that finds that layoffs not surprisingly can lead to all kinds of bad things 20 decline in lifetime earnings increased risk of divorce cardiovascular disease depression even suicide Oh my gosh!

10:59Hi! Hey! Hey! It's been a while. Yeah, it's been a second, hasn't it? Six months after first interviewing H and V for the story, I checked back in with them. They still live in the cute blue house with the tan shutters. H is still working for the company. V, on the other hand, struggled in the months after his layoff. He felt hopeless at times. He got on antidepressants, and that helped. But he wasn't able to find another job in his field, even after months of interviews. Now he's substitute teaching and getting an education degree. He feels like he's found his calling. He no longer wants to go back to the corporate world.

11:42Since I started this job as a teacher, I've had all these companies that I had applied in the last six months reaching out to me now. Oh, we're reaching out for an interview. Please schedule your interview. We would love to have you for an interview. It's like when your ex gets back in touch the moment you're with somebody else. Yes. Yes. That's exactly what happened. So they're doing okay. But the shock of the layoff is still with them. And whether it's justified or not, a lot of their anger is focused on the HR rep who laid V off. Look, I know it's not personal. I know she probably did not make that decision personally, but it's still personal to me.

12:28They both wish they could talk to her about it. I mean, if I could really see her, like, face to face, like, there are some things that I would, like, ask or that I'd say that I cannot politely say while maintaining my employment. They have questions like, why couldn't V go back to his desk? Why did the layoff feel so dehumanizing? Did it have to be that way? And when they told V it wasn't about his performance, was that really true? How does that layoff list get made anyway? This is one of the things that's hardest about layoffs. The black box of not knowing what's really going on behind the scenes.

13:10And so, I found someone for H and V to talk to. It can't be the actual HR person who laid V off. H still works for the company, and he feels like that would be too big of a risk. So it's a proxy HR rep. That's coming up after the break.

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15:08It's been about nine months since that extremely difficult moment when V was laid off. Hi. How are you all feeling? I just kind of want to get it over with, honestly, quite frankly. Are you having second thoughts? No, I just, I don't know, I just was feeling pretty angry yesterday. I'm hoping this proxy conversation will help V, but so far, it's bringing up bad memories of the layoff. Meanwhile, the proxy HR rep is on hold in the virtual waiting room. Her name is Katie Maylard. She's worked in HR for over 15 years. She actually prefers the term people operations, though. And she now has a consulting company, which is called Somehow I Manage.

15:53She's been the head of HR. She's built HR processes and systems. And she's laid a lot of people off. By her count, over 250 people. So we thought she could help decipher what V and H had been through. You all ready for me to let her in? Yeah, I'm ready. Let's do it. I click admit, and there's Katie in a light blue blazer with straight long brown hair. Hello. Hello. Hello. Nice. Look at you guys with your professional mics. We start with a round of introductions. I'm realizing now that I didn't, I forgot to mention my pronouns as well. I am she, her. Katie seems nervous. And H and V are not their usual chatty, friendly selves.

16:38V has a deep, furrowed brow. Could you explain what someone in HR actually does? Yes, that is a good question. So HR does a lot of different things. It feels like we're in a conference room, with H and V at one end of a really long table, and Katie at the other end. H keeps asking her pointed questions. Like, do you get training on how to be human in these conversations? No, not at all. So it's interesting. Some people have degrees in HR, okay? But that's mostly in, like, labor law and compliance. So it's learning labor laws. It's learning payroll requirements. Up to this point, V hasn't really engaged in the conversation.

17:30But finally, he speaks up. He tells Katie his layoff story about the surprise meeting, the HR rep's smile, not being allowed to return to his desk, the spilled coffee, and how he got into his car to drive home that day and was worried about getting into an accident because he was so upset. There was no check of like, hey, are you okay to drive? Do you need a couple minutes by yourself to calm yourself before you get into a car? No, they just say you have 10 minutes and you have to leave or we call security and kick you out. So we'll just pause right there. Katie, do you have any reactions right away?

18:06I've got a lot of reactions and I have a lot of questions. And my first thought here is like that is horrifying. And I am so sorry that this is what happened to you because this is just like a series of four decisions where this company decided that you were not a person. and that you didn't matter. And that's not okay. But I just honestly want to apologize on behalf of all people professionals for how that person acted and how the company empowered that person to act. Thank you. I appreciate that. I do have a question related to that. V's furrowed brow relaxes for a moment. It's the first time anyone in HR has apologized to him.

18:54And just like that, things in the room shift a bit. It's like they're still at that long conference room table, but their chairs are a little bit closer. Now they can have a real conversation. Another thing that I feel like HR actually falls short is they hand me a package and they say, just read that at home on your own time. I actually didn't open that package for three days. Yeah. And then I finally opened and then I find out that it was a severance pay. Yeah. She should have walked me through that. Yes. A hundred percent. I am a foreign. I'm an immigrant. This is my first corporate job. I do not know the culture.

19:34I am not middle class. I had always been poor. Education was the only thing that got me out of that. And I come here trusting that you who have been educated, who probably already have a mentality of a middle class, not disrespect, thought that I knew what was happening. I didn't. I have no idea. Yeah, I was going to ask if there was a severance package that was offered, because typically in terms of how termination conversations go down, you want to talk about severance and you want to talk about the package that's being given, because that's the best way to help folks move from the shock to, okay, let's think about how this is going to be possible.

20:15My perspective there is that regardless of what background you're coming from, HR should walk you through this intensely legal document. It's not written in English, right? It's written in legalese. And so every single time I have walked through the document explaining paragraph by paragraph what the headers mean and suggesting you go find your legal counsel if you'd like to, because even if you have grown up knowing a bit more of the game, the game changes. The game being corporate America. You're not even required to offer severance. So if you've gotten laid off at three different companies, you'll have three different experiences.

20:54Then V brings up another thing that unsettled him about the way his layoff went down. The fact that he wasn't allowed to go back to his desk. I know of another co-worker and friend who got being laid off maybe a month after. She was allowed. She was allowed to go back and say goodbye. And she was allowed to pack her baby pictures. I just don't understand that. And I guess I just want to hear what was the thought behind that. Yeah. I have questions about this HR rep. Were they early in their career? Were they experienced? How much practice they did for this? Because there's so much variety in how they treat people.

21:35The risk when you let someone go back to their desk is that they're going to talk to other people and distract them from their work. So that's typically why HR might not let you go back to the desk, because they think that there is a risk that you might talk or destroy property. And it's not necessarily about you. It could be that this HR person had terminated someone previously who threw their laptop on the ground. And so they're never letting that happen again. But just because one person might cause damage doesn't mean you have to take away the humanity of everybody. And your experience and the moments that you had layoff of people, are you being instructed to give the news and smile at the same time?

22:21Obviously, no. There's no reason to smile. However, I have had people on my team that I've had to coach around this because they have nervous smiles. And sometimes I also see HR reps kind of dissociate to a certain extent as a coping mechanism. and stop considering you human. They see you as a problem that needs to be dealt with. What I try to do and what I train my team to do in layoffs is like, let's treat these folks as if they might come back someday. H and V are nodding vigorously. They're learning things. H starts talking about his experience with layoff anxiety, how there were layoffs last January, then last June, then last July.

23:10and that sets off an alarm bell for Katie. Usually I find layoffs are, they're supposed to follow either a strategy change or they're supposed to follow like an issue with cashflow. Layoffs are a short-term cash saving strategy and they're not always in practice. In theory, they're a short-term cash saving strategy. So let's say they did them in January, gave it a couple months to stabilize, waited for the severance to stop, saw in June, we're still spending too much money, we need to do more, right? But to do them June and July, to me, I don't mean to accuse them, but I feel like they were trying to space these out to avoid having to be held accountable to the Warren Act.

23:55What Katie is mentioning, the Warren Act, is pretty much the only regulation we have around how layoffs go down in the U.S. There are a bunch of exceptions and complicated details. But basically, if a company has a certain number of workers and wants to lay off a large number of them during a 30-day period, then the Warn Act can get triggered. And the company is required to give 60 days advance notice. So Katie feels like the company might have done smaller rounds of layoffs spaced more than 30 days apart to avoid the Warn Act. So just not to say that's what they were doing. I don't know what the numbers are, but that could be a reason why they would space them out.

24:35Because otherwise, no company wants to do layoffs month after month. Because as soon as that layoff happens, you lose productivity for the remaining staff for weeks. And by the time you're getting it back, you're doing another round. That's crazy. Like, that's a crazy thing to do. We only have 30 minutes left in the interview. and there's this big question that's still lingering. When you get laid off, they say it's not about your performance, but is that really true? How does the list of who gets laid off actually get made? In the case of a layoff, you will always be told that it was a business decision, right?

25:13If it's a layoff, it means that job does not exist anymore. So how layoffs should happen and how the decision should go is starting with a strategy, right? So you need a strategy change of what are we not gonna focus on in order to afford losing this many people? And then you see what you're not focusing on. You see who was doing those jobs. And typically those are the jobs that would be laid off, right? That's obviously not anything to do with their performance, but that's not really what happens. So in my experience, sometimes it flows from strategy. Sometimes it's who is the last person hired.

25:54Sometimes they take cost into consideration. Sometimes the company gives each department head and says you have to cut 15 % of your workforce. It may be actually random and random seeming because it's based on the information the C-suite executive has, meaning what was managed up. Were you ever on a project that they heard about? And I think all of that to say, most of the time it's not. about you, right? It's about probably poor decisions that leaders made in hiring for a role that they weren't going to let settle or that they didn't have budget for or changing strategies. And it just sucks that because we have this kind of at-will employment system in the U.S.

26:40and every state outside of Montana, American businesses aren't as thoughtful in hiring because they know that they can let folks go easily. At the end of the conversation, I look at the Zoom boxes, and it feels like V, H, and Katie are no longer at the conference room table. Thank you for letting us ask you those questions. Thank you so much for having this hot conversation with us. Oh my god, thank you for sharing with me. Instead, it's like we're at a bar, and it's the end of happy hour. The best kind, where dirt has been dished, secrets revealed, and support and solidarity offered. And weirdly enough, I actually do feel like I have some closure on some of those kind of lingering questions I had.