Since his takeover of Twitter a few weeks ago, Elon Musk has made some controversial changes to improve the company’s financial position. Of particular note was the decision to slash Twitter’s global workforce by almost half, seeing the departure of entire teams and the dismissal of its Board of Directors.
Almost more controversial than the mass redundancies was the way they were carried out. Many reports suggested that employees being made redundant were given little notice and some team members had their computer and work email access cut off before their redundancy was confirmed. To make matters worse, it also appears that some of the employees had been let go prematurely and have now been contacted to discuss a possible return to work.
The Costs of Getting it Wrong
Following the mass layoffs, a class action lawsuit has been initiated by a group of former Twitter employees, which if successful, could be extremely expensive for the company.
Badly handled redundancies can also cause great reputational damage to a business. Many affected Twitter employees have been sharing their stories on social media, which has already led to Twitter users moving to alternative social media platforms such as Mastodon in protest. Reputational damage could also have an effect when the business looks to attract more staff in the future.
Likewise, a mishandled redundancy can cause an upset within the remaining workforce. It is difficult to foster a positive working environment in circumstances where employees feel that colleagues have been treated unfairly, or where they fear for their own future down the line.
Alternatives to Redundancy
The current economic climate which has given rise to sharp increases in overhead costs has put many employers and businesses in a similar difficult situation of needing to cut expenses and one of the obvious places to start is staffing costs. However, the decision to make employees redundant is a difficult one and it will be in a company’s best interests to first consider any alternatives other than redundancies.
Halting all external recruitments for new roles will naturally reduce your overheads, and considering unpaid sabbaticals, voluntary job shares, career breaks or secondments allows you to reduce staff costs whilst still retaining valuable and skilled staff. Restricting or banning overtime, offering employees the opportunity to take an extra holiday in exchange for a pro-rata reduction in salary and removing discretionary employee benefits are also all ways to save costs and therefore avoid redundancy.
When Redundancy is Unavoidable
As we head into a recession, redundancy is sometimes unavoidable. In 2022, many large companies such as Apple, Spotify, Netflix and Microsoft have already made the difficult decision to let people go. However, as we have learnt from Twitter, it’s how you carry out your redundancies that really matters.
Twitter’s digital layoffs were criticised as being impersonal, blunt and lacking in compassion. Employees dismissed in this impersonal way are bound to feel discarded, anxious and resentful. Unfortunately, Twitter’s approach follows similar strategies adopted by a growing number of companies in recent years, including P&O ferries which dismissed 800 staff over Zoom in March 2022.
Whilst redundancy may be a necessity for a business, handling it in an open and supportive way will make a significant difference in how people cope and react to the event.
The Law on Redundancy in the UK
In the UK, while redundancy can be a fair dismissal, employers are expected to follow formal procedures, especially in larger-scale redundancy situations where some aspects of the process are legal requirements. It is essential, therefore, that employers carry out the necessary preparatory work to ensure that the process is carried out correctly.
When an employer is considering redundancies, it should hold meaningful individual consultations with ‘at risk’ employees or those who would be ‘affected’ by the redundancies. This is a necessary part of any fair dismissal or redundancy process. As part of these discussions, alternative options to redundancy should be put forward and employees should be allowed to express their thoughts and feelings towards these proposals. Alternatives to redundancy may include:
- Redeploying or retraining employees
- Job shares
- Flexible shifts
- Voluntary career breaks or redundancy
- Early retirement
An organisation dismissing twenty or more employees in a single establishment has to engage in a collective consultation, with a trade union or elected employee representatives.
The consultation process, which must be consultation with a genuine view to reaching an agreement, should look at ways of avoiding the dismissals, reducing the number of employees to be dismissed and mitigating the consequences of the dismissals.
What Can We Learn From Twitter’s Mistakes?
The law on redundancies is vastly different in the UK; however, the takeaway from Musk’s approach at Twitter, irrespective of the applying laws, is that a failure to treat potentially redundant staff with respect and care is likely to result in considerable backlash. Employers should instead adopt a carefully planned, fair redundancy process and should carry out that process with transparency and compassion.
If you have any questions about redundancy procedures, please contact a member of our employment team via email.
