Company Culture Eases Layoff Impact Says Affirm CEO Max Levchin
Affirm's CEO, Max Levchin, shared valuable insights on empathetic layoffs during an episode of The Twenty Minute VC podcast, uploaded on Wednesday. He recounted his first experience organizing layoffs, stating he felt the urge to "run and hide" due to his fear of responsibility.
Levchin discovered that being present with departing employees and assisting them in packing was not only cathartic for him but also beneficial for those affected. A colleague advised him, "You can play this from the comfort of your office -- or in the middle of the floor that's crying. Go be with the people. You'll feel better in the end and they'll feel better in the end."
In 2023, Affirm laid off 16% of its workforce, amounting to 485 individuals, following a previous cut of about 140 jobs in February of the preceding year. The company, founded in 2012 and public since 2021, navigated these challenging moments by emphasizing its company culture.
Levchin noted that employees who were let go understood the necessity behind these decisions, expressing a desire to return to the company. "If the culture of the company is great, the blow is much softer," he explained. "People understand that you tried with every possible strategic or tactical idea to not have to go through this."
Examples of both well-handled and poorly managed layoffs have emerged in recent years. Brian Chesky, CEO of Airbnb, received commendation for his support of 1,900 laid-off employees in 2020, creating a public directory aimed at helping them secure new jobs.
In stark contrast, Vishal Garg, CEO of online mortgage startup Better, faced criticism for a mass layoff conducted over a brief Zoom call in 2021, resulting in significant outrage. In a follow-up apology letter, Garg acknowledged his failure to demonstrate respect during the call.
