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.”


Judge Zia Faruqui is trying to teach you crypto, one ‘SNL’ reference at a time

His decisions on major cryptocurrency cases have quoted "The Big Lebowski," "SNL," and "Dr. Strangelove." That’s because he wants you — yes, you — to read them.

The ways Zia Faruqui (right) has weighed on cases that have come before him can give lawyers clues as to what legal frameworks will pass muster.

Photo: Carolyn Van Houten/The Washington Post via Getty Images

“Cryptocurrency and related software analytics tools are ‘The wave of the future, Dude. One hundred percent electronic.’”

That’s not a quote from "The Big Lebowski" — at least, not directly. It’s a quote from a Washington, D.C., district court memorandum opinion on the role cryptocurrency analytics tools can play in government investigations. The author is Magistrate Judge Zia Faruqui.

Keep ReadingShow less
Veronica Irwin

Veronica Irwin (@vronirwin) is a San Francisco-based reporter at Protocol covering fintech. Previously she was at the San Francisco Examiner, covering tech from a hyper-local angle. Before that, her byline was featured in SF Weekly, The Nation, Techworker, Ms. Magazine and The Frisc.

The financial technology transformation is driving competition, creating consumer choice, and shaping the future of finance. Hear from seven fintech leaders who are reshaping the future of finance, and join the inaugural Financial Technology Association Fintech Summit to learn more.

Keep ReadingShow less
The Financial Technology Association (FTA) represents industry leaders shaping the future of finance. We champion the power of technology-centered financial services and advocate for the modernization of financial regulation to support inclusion and responsible innovation.

AWS CEO: The cloud isn’t just about technology

As AWS preps for its annual re:Invent conference, Adam Selipsky talks product strategy, support for hybrid environments, and the value of the cloud in uncertain economic times.

Photo: Noah Berger/Getty Images for Amazon Web Services

AWS is gearing up for re:Invent, its annual cloud computing conference where announcements this year are expected to focus on its end-to-end data strategy and delivering new industry-specific services.

It will be the second re:Invent with CEO Adam Selipsky as leader of the industry’s largest cloud provider after his return last year to AWS from data visualization company Tableau Software.

Keep ReadingShow less
Donna Goodison

Donna Goodison (@dgoodison) is Protocol's senior reporter focusing on enterprise infrastructure technology, from the 'Big 3' cloud computing providers to data centers. She previously covered the public cloud at CRN after 15 years as a business reporter for the Boston Herald. Based in Massachusetts, she also has worked as a Boston Globe freelancer, business reporter at the Boston Business Journal and real estate reporter at Banker & Tradesman after toiling at weekly newspapers.

Image: Protocol

We launched Protocol in February 2020 to cover the evolving power center of tech. It is with deep sadness that just under three years later, we are winding down the publication.

As of today, we will not publish any more stories. All of our newsletters, apart from our flagship, Source Code, will no longer be sent. Source Code will be published and sent for the next few weeks, but it will also close down in December.

Keep ReadingShow less
Bennett Richardson

Bennett Richardson ( @bennettrich) is the president of Protocol. Prior to joining Protocol in 2019, Bennett was executive director of global strategic partnerships at POLITICO, where he led strategic growth efforts including POLITICO's European expansion in Brussels and POLITICO's creative agency POLITICO Focus during his six years with the company. Prior to POLITICO, Bennett was co-founder and CMO of Hinge, the mobile dating company recently acquired by Match Group. Bennett began his career in digital and social brand marketing working with major brands across tech, energy, and health care at leading marketing and communications agencies including Edelman and GMMB. Bennett is originally from Portland, Maine, and received his bachelor's degree from Colgate University.


Why large enterprises struggle to find suitable platforms for MLops

As companies expand their use of AI beyond running just a few machine learning models, and as larger enterprises go from deploying hundreds of models to thousands and even millions of models, ML practitioners say that they have yet to find what they need from prepackaged MLops systems.

As companies expand their use of AI beyond running just a few machine learning models, ML practitioners say that they have yet to find what they need from prepackaged MLops systems.

Photo: artpartner-images via Getty Images

On any given day, Lily AI runs hundreds of machine learning models using computer vision and natural language processing that are customized for its retail and ecommerce clients to make website product recommendations, forecast demand, and plan merchandising. But this spring when the company was in the market for a machine learning operations platform to manage its expanding model roster, it wasn’t easy to find a suitable off-the-shelf system that could handle such a large number of models in deployment while also meeting other criteria.

Some MLops platforms are not well-suited for maintaining even more than 10 machine learning models when it comes to keeping track of data, navigating their user interfaces, or reporting capabilities, Matthew Nokleby, machine learning manager for Lily AI’s product intelligence team, told Protocol earlier this year. “The duct tape starts to show,” he said.

Keep ReadingShow less
Kate Kaye

Kate Kaye is an award-winning multimedia reporter digging deep and telling print, digital and audio stories. She covers AI and data for Protocol. Her reporting on AI and tech ethics issues has been published in OneZero, Fast Company, MIT Technology Review, CityLab, Ad Age and Digiday and heard on NPR. Kate is the creator of and is the author of "Campaign '08: A Turning Point for Digital Media," a book about how the 2008 presidential campaigns used digital media and data.

Latest Stories