CBS’s Jick Advocates Compassion in Downsizing Processes

July 31, 2020

During these times of pandemic, companies need to challenge what were formerly considered “sacred cows” such as real estate and other assets in order to keep their business afloat, and when it comes time to lay employees off, it needs to be done with compassion, according to Todd Jick, Professor of Management at Columbia Business School (CBS) and an expert in leadership and organizational change.

“It can be handled in ways to ease the burdens, increase loyalty and goodwill, and decrease resistance. Or it can be done in such a way to be much more difficult and costly, and sacrifice employee goodwill,” he said during the webinar “Leadership and the Pandemic - Rising to the Occasion,” moderated by Juan José Silva (MBA'19) and chaired by Georges de Bourguignon (MBA/MIA’17), President of the CBS Alumni Club and member of the Santiago Global Center’s Advisory Board.

“Crises take leaders to places that they would not have otherwise gone,” Jick added.

The CBS professor reviewed two cases where well known companies had to let employees go. The first, negative example was with the electric scooter firm Bird, which summoned employees to an online meeting, abruptly letting them know that their jobs had been terminated and locking out their company-issued MacBooks shortly thereafter.

On the other hand, when Airbnb had to downsize, with nearly 1,900 out of 7,500 employees leaving the company, CEO Brian Chesky shared heartfelt communications with the whole staff, explaining the reasons why it had to happen and sharing his pain in an unavoidable occurrence. In so doing, he worked toward sustaining loyalty for those employees remaining, forming long-term brand value and keeping consistency between values and actions.