CNET News Video
Daily Debrief: Here's what it feels like to fire peopleIn a tech recession, companies are tightening their belts. But there's a human cost--both for the person receiving the pink slip as well as for the executive bearing the bad news. On the CNET News Daily Debrief, Charles Cooper and Rafe Needleman talk...
^M00:00:01 [ Music ] ^M00:00:04 >> What would a tech recession leading to wide-scale layoffs, more and more pink slips are getting handed out but what about the person that's got to be the bearer of bad news? Welcome to the CNET News Daily Debrief, I'm Charlie Cooper here with my colleague Rafe Needleman. Rafe this week CNET News is running a--this week and next actually, a series on how the recession, if we can now call it a recession. >> It's recession. >> Is now affecting technology in business and you have a very interesting piece up today with a CEO who actually spoke with you on the condition of anonymity. >> Yes. >> About what went through his mind when he had to hand out the bad news? Can you tell us a little bit without disclosing the person's identity, who is this guy? >> Well I can't. In the course of my career of covering startups which goes back about... >> Many years. >> Eight or nine years, I've interviewed about one thousand CEO's of new companies and this is one of those CEO's I know from that era who has been through both the first bubble the 99 to 2001 bubble, and is now going through the collapse of the bubble that we just had a run up to. He's done more than one round of layoffs. He's had success and failure in companies and is now on his third leadership role and having to deal with this tough economy. >> And you got him to talk on a personal level >> From his perspective what was it like having to sit across from somebody and say, "I'm sorry but I've got to take away your livelihood?" >> I really wanted to get into that and I think this fellow did a lot of emotional preparation to deal with this to the extent that as he said he is at peace with it. He said this to me several times--if you do what you have to do with a lot of diligence and rigor and care then you can be at peace with yourself when you have to sit down across from somebody and say I'm sorry we're letting you go. >> And the short list of those checklist items would be what? >> Of why you have to let somebody go? >> Of how do you prepare yourself to do that? >> Well for him it was more of the thought that he was doing what was necessary and there was no other option for the company. A CEO's role is to make the company successful and survivable and it's not unfortunately to look out for the people that are hired. Now everybody is human and I don't know a single CEO who goes into the business trying to take advantage of people, especially people that work for them. But every person who's in a leadership position has to balance the job of being responsible for what they're responsible for and also for being responsible for the people who have given them their trust to "you're going to feed me and take care of my family" because I'm doing this work for you. It's a bargain. >> And in this case the company itself wasn't facing an immediate problem--this is something he was looking over the horizon. >> He was looking at projections; they were looking at their contracts and seeing softness in Q3 and Q4 this year and looking at what's happening in the economy and it's fairly obvious that the revenues were not going to be there. Instead of maintaining this...they've been hiring people and actually what he did tell me was that the net gain of employees in 2008 is still higher; they're still a net gain; fairly significant net gain versus the number of people they had to lay off in this last round. So another thing that he consults himself with was like, "Look I had to lay off x people but overall I have given more people jobs and they still have them." >> In this case there was a report recently from Challenger Gray talking about employment in the IT business. If I've go the numbers correctly there are for the first three quarters of the year about 140,000 jobs lost--that's more in the first three quarters of this year than all of 2007 so it ain't great. >> No it's not. >> On that cherry note, thanks Rafe. On behalf of CNET News, I'm Charlie Cooper. [ Music ]