Are layoffs a reputation killer or just part of doing business?

Credit Karma’s chief people officer said many layoffs can — and should — be avoided. Here’s how she steers clear of them, and why she thinks you should, too.

Businessman walking away from colleagues with head bowed - stock photo

HR chiefs disagree as to whether cutting jobs is shameful or an unavoidable part of staying afloat.

Photo: Justin Pumfrey/The Image Bank/Getty Images

Are layoffs a scarlet letter on your company’s reputation? Not all HR leaders agree.

Tech companies have already cut thousands of jobs this year; some are now implementing a second round of layoffs. But even among some of Silicon Valley’s most seasoned HR chiefs, there’s substantial disagreement over whether cutting jobs is shameful or an unavoidable part of staying afloat.

“If your company does layoffs, [it] seems like you should be disqualified from any ‘best place to work for’ lists/surveys for at least one year following,” Credit Karma’s HR head, Colleen McCreary, posted on LinkedIn earlier this month. “And if they’re handled poorly, that disqualification extends even longer, especially large public companies who should know better.”

McCreary, whose full title is chief people, places and publicity officer, keeps reputation in mind when thinking about personnel decisions. She told me she wrote the post after cringing at other companies named to “best of” lists for company culture despite being “in a continual habit of laying people off.”

Putting aside the veracity of “best places to work” lists — McCreary dismissed most of them as “bought and paid for,” anyway — should companies consider any layoffs to be a mark of shame?

It depends on a few things. McCreary directed most of her criticism at companies conducting habitual layoffs rather than one-off “business reaction” cuts.

McCreary also cut some slack for the companies that did layoffs during the first year of the COVID-19 pandemic, and praised Airbnb as one example of a company that conducted pandemic-related layoffs while employing “a lot of empathy” and later offering laid-off workers the opportunity to return.

Larger companies in general have more responsibility to find a way to retain their workers, she said.

“I think the expectation is much higher, the bigger your organization is and the larger your company is, to be able to defend why someone couldn’t be moved around or retrained into working in another part of the company,” McCreary said.

Yet even the current market downturn shouldn’t be an excuse for a round of layoffs in most cases, McCreary said.

“We’ve known that this inflation experience was coming. It’s not unpredictable. We were talking about it for almost a year now,” McCreary said. “Just as many companies are thinking about long-term product strategy, you’ve got to be thinking about the short-term impact of those kinds of things.”

Salt in the wound?

Not everyone agrees. Nolan Church, who served as chief people officer at Carta before co-founding the executive talent marketplace Continuum, called McCreary “incredibly smart” and said her background speaks for itself.

But her post, he said, amounted to rubbing “salt in the wound” of leaders who were making tough choices.

“I think her post lacks empathy,” Church told me, stating that HR professionals tend to hold “some of the most luxurious beliefs that exist within a company.”

As a first-time founder, Church said he has a new appreciation for a set of challenges that he didn’t grasp even as a senior executive. Other HR leaders could benefit from empathizing more with leaders who are “actually in charge of the P&L, running the business and making sure that they can make payroll,” he said.

Pressure from investors to grow at all costs led many companies to over-hire in the last two years. Church disagreed with McCreary that this level of inflation was predictable.

“Investors are the arbiter of how CEOs run their companies,” Church said. “When the macroeconomic rug gets pulled from founders, everything changes, unfortunately.”

In Church’s view, leaders have two choices here: Don’t make any changes, and “end up like Fast,” the payments startup that suddenly shut down in April, or “pull the emergency brake and course-correct,” likely by cutting jobs. Continuum this month launched a "product line" of layoff consulting services aimed at helping leaders make these decisions.

“Survival is the name of the game in moments like this,” Church said.

Some layoffs are better than others

David Hanrahan, who stepped down as Eventbrite’s chief HR officer in May, called McCreary’s post “provocative,” recalling that LinkedIn and Salesforce had made it on “perennial best employer lists” despite layoffs in 2020.

“Marc Benioff had committed to no layoffs at the start of COVID for 90 days, and just a few months after that period, I think he laid off 1,000 employees,” Hanrahan told me. “And then they announced a hiring effort of, like, 12,000 employees.”

Yet at many large companies, layoffs are the norm and often fly under the radar. Hanrahan said it would be “a little bit too crude” to say “you’re not a ‘best employer’ if you lay people off.” He agreed with both McCreary and Church that the circumstances around a layoff matter. provides a “perfect example” of a bad layoff, Hanrahan said, between the announcement over Zoom and a lack of ownership on the part of the company’s leadership. Cutting pay, reassigning workers internally to limit layoffs and trimming costs like SaaS contracts can make for a much more defensible layoff.

Survival is the name of the game in moments like this.

When Credit Karma took a 70% revenue hit in 2020, McCreary said the company cut pay in order to keep jobs, and offered employees “off the bus” packages if they proactively resigned. And Credit Karma moved several dozen employees in departments like recruiting and marketing (that needed to shrink) to other positions.

This is a great alternative to layoffs, Church and Hanrahan agreed, though it’s much more available to large companies than small ones. So why don’t more big companies move employees to new roles rather than lay them off?

“Executive teams don’t trust their next-level leaders to have been managing their workforce,” Hanrahan said. When they realize they need to cut 30% of their head count operational expenditure, “they assume that that means we’ve got 30% of people who are underperforming, and let’s just go find them.”

How to avoid layoffs

If you truly want to avoid layoffs, start planning now. McCreary recommended that management teams commit in advance to either no layoffs or only using layoffs as a last resort. Executives should continuously scrutinize whether their hiring plans make sense relative to their revenue.

And for companies with at least 100 employees, no more than one-third of workers should be new to the company. (McCreary defined “new” as having joined within the past year.)

“That’s a pretty big warning sign of: Can those people even be productive and effective in your organization?” McCreary said.

Finally, McCreary recommended that HR leaders undertake a “people review” every quarter: Sit down with managers and discuss their teams, where the gaps are and whether any employees should be moved around.

“I’m hopeful that more people will get the word out that you can do this better,” McCreary said. “I think it’s better for society at large if we take care of each other.”


Upstart has a new plan to sell Wall Street on its loans

The AI-powered lender will hold some loans on its balance sheet as it seeks partners for long-term capital.

Despite the current struggles, Upstart views the marketplace model as the best way to write to keep its loan business growing.

Photo: Upstart

After a revenue drop its CEO called “unacceptable,” the leadership at fintech lender Upstart is making a bet on the strength of its ability to underwrite loans with AI.

The San Mateo company is planning to leave some loans on its balance sheet that investors do not want to buy, as concerns about the economy shift Wall Street away from backing riskier consumer debt. Rather than pull back on its lending in response, the company said it will hold some loans as it seeks longer-term capital partners.

Keep Reading Show less
Ryan Deffenbaugh
Ryan Deffenbaugh is a reporter at Protocol focused on fintech. Before joining Protocol, he reported on New York's technology industry for Crain's New York Business. He is based in New York and can be reached at
Sponsored Content

How cybercrime is going small time

Blockbuster hacks are no longer the norm – causing problems for companies trying to track down small-scale crime

Cybercrime is often thought of on a relatively large scale. Massive breaches lead to painful financial losses, bankrupting companies and causing untold embarrassment, splashed across the front pages of news websites worldwide. That’s unsurprising: cyber events typically cost businesses around $200,000, according to cybersecurity firm the Cyentia Institute. One in 10 of those victims suffer losses of more than $20 million, with some reaching $100 million or more.

That’s big money – but there’s plenty of loot out there for cybercriminals willing to aim lower. In 2021, the Internet Crime Complaint Center (IC3) received 847,376 complaints – reports by cybercrime victims – totaling losses of $6.9 billion. Averaged out, each victim lost $8,143.

Keep Reading Show less
Chris Stokel-Walker

Chris Stokel-Walker is a freelance technology and culture journalist and author of "YouTubers: How YouTube Shook Up TV and Created a New Generation of Stars." His work has been published in The New York Times, The Guardian and Wired.


Does your boss sound a little funny? It might be an audio deepfake

Voice deepfake attacks against enterprises, often aimed at tricking corporate employees into transferring money to the attackers, are on the rise. And at least in some cases, they’re succeeding.

Audio deepfakes are a new spin on the impersonation tactics that have long been used in social engineering and phishing attacks, but most people aren’t trained to disbelieve their ears.

Illustration: Christopher T. Fong/Protocol

As a cyberattack investigator, Nick Giacopuzzi’s work now includes responding to growing attacks against businesses that involve deepfaked voices — and has ultimately left him convinced that in today's world, "we need to question everything."

In particular, Giacopuzzi has investigated multiple incidents where an attacker deployed fabricated audio, created with the help of AI, that purported to be an executive or a manager at a company. You can guess how it went: The fake boss asked an employee to urgently transfer funds. And in some cases, it’s worked, he said.

Keep Reading Show less
Kyle Alspach

Kyle Alspach ( @KyleAlspach) is a senior reporter at Protocol, focused on cybersecurity. He has covered the tech industry since 2010 for outlets including VentureBeat, CRN and the Boston Globe. He lives in Portland, Oregon, and can be reached at


Binance’s co-founder could remake its crypto deal-making

Yi He is overseeing a $7.5 billion portfolio, with more investments to come, making her one of the most powerful investors in the industry.

Binance co-founder Yi He will oversee $7.5 billion in assets.

Photo: Binance

Binance co-founder Yi He isn’t as well known as the crypto giant’s colorful and controversial CEO, Changpeng “CZ” Zhao.

That could soon change. The 35-year-old executive is taking on a new, higher-profile role at the world’s largest crypto exchange as head of Binance Labs, the company’s venture capital arm. With $7.5 billion in assets to oversee, that instantly makes her one of the most powerful VC investors in crypto.

Keep Reading Show less
Benjamin Pimentel

Benjamin Pimentel ( @benpimentel) covers crypto and fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at or via Google Voice at (925) 307-9342.


Trump ordered social media visa screening. Biden's defending it.

The Knight First Amendment Institute just lost a battle to force the Biden administration to provide a report on the collection of social media handles from millions of visa applicants every year.

Visa applicants have to give up any of their social media handles from the past five years.

Photo: belterz/Getty Images

Would you feel comfortable if a U.S. immigration official reviewed all that you post on Facebook, Reddit, Snapchat, Twitter or even YouTube? Would it change what you decide to post or whom you talk to online? Perhaps you’ve said something critical of the U.S. government. Perhaps you’ve jokingly threatened to whack someone.

If you’ve applied for a U.S. visa, there’s a chance your online missives have been subjected to this kind of scrutiny, all in the name of keeping America safe. But three years after the Trump administration ordered enhanced vetting of visa applications, the Biden White House has not only continued the program, but is defending it — despite refusing to say if it’s had any impact.

Keep Reading Show less
Anna Kramer

Anna Kramer is a reporter at Protocol (Twitter: @ anna_c_kramer, email:, where she writes about labor and workplace issues. Prior to joining the team, she covered tech and small business for the San Francisco Chronicle and privacy for Bloomberg Law. She is a recent graduate of Brown University, where she studied International Relations and Arabic and wrote her senior thesis about surveillance tools and technological development in the Middle East.

Latest Stories