Mass layoffs put bosses in the line of fire

By Judy Greenwald, FinancialWeek.com

On Nov. 14, 2008, Jing Wu, who had been terminated from his engineering job at software startup SiPort Inc. a few hours earlier, returned to the company’s Santa Clara, Calif., headquarters and requested a meeting with three executives.

They agreed, and the four went into a conference room. At some point, Mr. Wu allegedly pulled out a gun and shot all three to death. He was captured the next day and now faces murder charges.

While Mr. Wu was reportedly terminated for performance reasons, many observers fear similar scenarios during the next several months because the number of layoffs at companies nationwide is expected to rise.

There is no ironclad guarantee someone will not become violent after being laid off or fired, experts say. But there are steps companies can take to significantly mitigate the risk, thus ensuring the safety of their employees and protecting their firms from potential liability.

Many experts say they expect more such incidents. “We know that’s going to be happening more and more as the economy worsens,” said Michael Tabman, president of Kansas City, Mo.-based SPIRIT Asset Protection L.L.C.

Observers recommend having a layoff security plan in place. “The critical thing is to have a plan, have an established method for releasing people,” said Paul French, senior director at Threat Management & Protection Inc. in Huntington Beach, Calif. “When the numbers don’t look good, you have to have a planning meeting, and you have to have a strategy already in place” to handle layoffs, he said.

Employers should give as much warning as possible of an impending layoff, observers say. “The tendency of many employers is to keep everything as secret as possible,” so when the news finally does break, people feel taken aback, and believe the employer has acted treacherously, said Richard Denenberg, director of Red Hook, N.Y.-based Workplace Solutions Inc.

“The temperate approach would be to try to share with the employees whatever the fortunes of the company are,” and warn them it may become necessary at some point to downsize operations, he said.

Be sure to give employees the reasons for the layoffs, making it clear individuals are not being singled out, experts say. “Let them know as fully and completely as possible,” why they are being selected for the layoff, said Mr. Denenberg.

If you know, for instance, they have worked very hard, tell them, “You’ve done a great job, but the particular product that your team is making is one that we’re going to have to discontinue.”

Treat employees with dignity, say observers. “You’ve just got to treat employees with the same dignity and respect as you did to hire them, which is being professional about it, but also being empathetic and sympathetic,” said Deborah Manning, former director, recruiting and affirmative action program manager at Houston-based energy company Dynegy Inc.

Avoid the “walk of shame,” said Gregory Bangs, vice president and worldwide crime, kidnap, ransom and workplace violence product manager at Warren, N.J.-based Chubb & Son Inc. “Give them the courtesy of not marching out with a security person.”

At Dynegy Inc., laid-off employees would be accompanied by a manager when they went back to their desk to remove their personal belongings, said Ms. Manning. Layoffs also were scheduled for the lunch hour, or when other employees were not around, while another manager might be posted by the door to divert anyone from coming in, said Ms. Manning, who is now an executive recruiter. Experts also advise giving laid-off employees as much help as possible including, for instance, outplacement services.

At Dynegy, the company would verbally explain issues such as severance and unemployment when workers are being laid off, but also give them a letter outlining those issues, recognizing people often do not really hear what is being said when they are upset, said Ms. Manning.

Be alert to what line supervisors and managers say about particular employees to identify those who may become violent, then take appropriate security measures, experts say.

“You have to look at whom you’re releasing and why,” said Mr. French. “What do we know about these people? What do we know about their lifestyle? What other influences are there in their worlds? Do they have four kids in college? Is one of their relatives critically ill? Are they going through a messy divorce? All of these things are additional pressures.”

“We all have our tipping point,” said Mr. Tabman. “If you know your people, and you keep your ears open, you’ll know how dangerous an environment you’re entering” and can approach it with the caution that may be called for.

J.R. Roberts, of Savannah, Ga.-based J.R. Roberts Security Strategies, said if somebody is a known hothead, “then typically you’ll have a security presence” to deal with the situation.

“You have to have some sort of security there to maintain peace,” either somewhere they can monitor the situation or in the room “in the guise of being an individual from corporate,” said Mr. French.

In addition, “We always tell people, ‘Never, ever, put your key people together in a meeting” with employees being terminated, said Mr. French. “It puts you in a position of negotiating something that’s already happened.”

There also should be security measures in place after the layoff, say observers. “Ramp up the security during the ‘golden week’ after a firing,” said Judd N. Green, president of the Indianapolis-based Green Consulting Group Inc. Hire additional security guards and change access codes, he said.

If a person comes back with a gun and cannot get in, “chances are they’re just going to go away,” said Mr. Bangs.

Richard F. Kane, an attorney with Moore & Van Allen P.L.L.C. in Charlottesville, N.C., said, “If you identify any particular individual that you think is prone to violence, then I would have security pay particular attention” to that person’s movement, including knowing their car’s make and model and calling for reinforcement if he or she shows up in the parking lot.

At Dynegy, workers are warned against lending their building access badges to laid-off workers, or inviting them back into the workplace, said Ms. Manning. If they do come back, they are subject to the same security measures as other visitors, including a metal detector, she said.

Most observers recommend employers refuse requests for meetings after an employee has been laid off, because there is little to be gained, and it could put employees at risk. “What’s the point of bringing them back into the workplace and rehashing things?” asked Greg S. Labate, an attorney with Sheppard Mullin Richter & L.L.P. in Costa Mesa, Calif. “That leads to further problems.”

Most observers recommend against laying people off on a Friday. Historically, laid-off people who are subsequently violent were let go on a Friday, said Mr. French. “They have two days to sit at home and basically brood about what happened,” he said.

But not everyone agrees. Human resource professionals recommend layoffs be conducted on a Friday “because the thinking is a weekend at home with the family will help calm things down,” Mr. Kane said.

Experts say many problems can be avoided much earlier, if companies conduct careful pre-hiring background checks. “The biggest measure I think people fail to pay attention to is pre-employment screening,” said Mr. French