Among the saddest facets of the restaurant business lately has been the preponderance of layoffs and establishments closing down. Layoffs and closures have affected corporate outfits and privately-owned businesses alike, and in some cases major chains have been forced to restructure or file for Chapter 11 bankruptcy protection. Restaurants in seasonal areas have particularly suffered hardships, with many that haven’t closed down limiting their hours to lunch or dinner, or shutting down for a few days each week. Most of us in the business over the last two years have heard anecdotes of a nearby restaurant shutting its doors for good, or a longstanding ownership group changing hands. A restaurant near my neck of the woods recently closed its doors without first notifying staffers, letting them show up for work only to find the building empty and the doors boarded shut.
While this is the exception to the rule, handling layoffs in a restaurant can provide a substantial challenge for a management team. Whether the layoffs are collective or individual, there is a right and a wrong way to lay off employees. When layoffs are imminent or when store closure is possible, the best methods I’ve seen of handling staff require a direct approach. Let your staff know what’s going on. They’ve owned their workspace in the past; let them take ownership of the potential for future layoffs or store closure. Being up front with staff will eliminate the subversive nature of rumors or backbiting that can undermine your staff. The only productive scenario involved in mass layoffs involves direct, open communication and rewards for employees who stick around when store closure is imminent.
When handling individual layoffs, there is only one method. Be direct. Whether layoffs occur due to staff restructuring or they’re just a personnel issue, it’s important to say it immediately in private, make it quick, and list the reasons why. Never beat around the bush when laying off an employee, and never enumerate the reasons for a layoff before saying what needs to be said. Keep talking, so that employees don’t feel the need to respond. There’s no need for emotion or apology, and there’s no need to make it personal. The best layoffs happen after the process of laying the groundwork; after a substantial performance review that lists the necessary areas for improvement and time for the employee to meet that performance level. When a groundwork-laying performance review has been executed, a manager can tell an employee that he or she is not laying off the employee; the employee is doing it to him or herself. Appropriate documentation, such as a write-up report or an incident review, will strengthen management’s case during an unemployment benefits hearing.
When laying off an employee, regardless of the reason, it’s important to have another manager in the room as a witness. It’s also important to not make the layoff personal. The reason for the layoff is business-related only; don’t make it a matter of me vs. you. Clearly state the reasons for the restructuring and move on. It is often helpful to offer a letter of reference when applicable, or even to suggest future businesses the employee might consider for employment. This is all in an effort to maintain a cordial tone, and not engender an atmosphere of contention. The only positive result of a layoff is the same as that of a ride on an airplane—everyone walks away when it’s over.
When dealing with layoffs during my management career, it has struck me that there are two ways an employee can handle being laid off—complete understanding or total shock. Either an employee has been laid off before, or he or she hasn’t. Some employees respond as though they knew it was coming. They’ve seen the severance package envelope before, or they’ve been called into the office with two awaiting managers. They know there is only one reason the General Manager waits outside the back door at their scheduled time. Or, they had no idea it was coming. Certainly, the latter is harder to deal with, but following the appropriate steps can ease the process for everyone.