Reduction in Force Toolkit
Updated: Apr 1, 2020
Linked is a reduction in force toolkit, purpose-built for startups facing the necessity of layoffs as a result of the COVID-19 crisis. This includes ~20 templates such as separation agreements, communications, logistics plans, manager training, selection scoring, etc.).
Businesses around the world have been impacted by the COVID-19 crisis. "Shelter in place" orders have affected more than 100 million US citizens. Schools are closed. Supply chains have been disrupted. Normal commerce has been choked off and revenue forecasts are in disarray as businesses try to predict the duration and intensity of the disruption.
While the US government has stepped in with economic stimulus, many companies are faced with the necessity of rapidly reducing their cost structure to maintain the health (or even the life) of their organization.
While most startups expect to grow their companies through a period of unprofitability, the sudden contraction in revenue is a shock to the startup community, resulting in dramatically increased cash burn.
Headcount and related costs (facilities, contractors, temporary labor, payroll taxes, employee programs, etc.) account for more than 80% of most business expenses, typically even higher in the technology industry. Therefore, it is impossible to meaningfully impact the cost structure of most businesses without adjusting the rate of spend on people.
This reduction in force (RIF) toolkit provides frameworks and templates for businesses that have been forced to reevaluate their staffing levels during this time. While massively complex organizations will require much more detailed plans, this toolkit is specifically targeted and somewhat simplified for organizations that have:
extensive worker distribution across multiple locations
a need to meaningfully adjust their staffing levels (not just implement a hiring freeze, delay/discontinue bonus payments, or other less severe actions)
limited Human Resources infrastructure and minimal leadership experience with organizational realignments and staff reductions
A word of caution, while these templates have been built with legal and compliance requirements in mind, individual circumstances will vary. Therefore, please review all employment actions and associated documents with employment counsel in advance of implementing a reduction in force.
Note: The embedded links above download a zip file which contains the templates - best to do from a computer vs. mobile device. If that does not work or isn't convenient, here is a link to a public Google Drive folder which may be easier to access.