by Tom Murphy

What It’s Like To…Fire Half Your Staff

Dec 15, 20045 mins
IT Leadership

October 4, 2001, was the most difficult day of my professional life.

We called in our 270 employees one at a time—alphabetically, so as not to give anything away. When each meeting was over, we asked the employee to go home. Nearly 120 of them left with pink slips and severance packages in hand; the other 150 survived.

I had done everything I could to prepare my staff, my direct reports and myself for that day—for what the HR folks insisted we refer to as a reduction in force, but what felt more like ripping out my heart.

I was in my office on Sept. 11 when our COO came in to tell me a plane had hit one of the World Trade towers in New York City. It was my job to get our incident response center open. Because of the nature of our business, we spend a lot of time preparing for the worst, from moving ships around hurricanes to responding to global incidents. I fired up the three big-screen, flat-panel TVs before the second plane hit.

We spent the first days after 9/11 getting our passengers and employees home safely. Then, we focused on the future. Within an hour of the attacks, cancellations began pouring in. Within a few days, we were facing a revenue hole of $250 million. And it wasn’t coming back.

The CEO assigned six of us to what we called the survive and thrive committee. I still have reams of paper describing things we thought we could do to keep the business afloat, from taking things away from the customer (such as lobster dinners) to mothballing ships. We went through every operating group—in some cases, cutting fat; in others, muscle.

It wasn’t clear how many employees we would have to let go, but I knew my staff would be hardest hit.

When I started two and a half years earlier, the company was investing in four of the largest cruise ships ever built. We were putting $10 million worth of IT on each. To do that, I set about creating a high-performance IT organization. We initiated a $200 million systems overhaul.

Now, with the revenue shortfall, the CEO made it clear that the massive IT project was dead. And most of the people we had hired to staff it would have to go.

I called an all-IT meeting on Sept. 19. I told them there would be layoffs. People said, “We’ll work part time; we’ll take pay cuts.” But I just had to keep telling them throughout the two-week process of deciding who would stay and who would go that there was nothing anyone could do.

I gathered five trusted direct reports and two finance folks, and created a war room. Assuming our technology environment would stay static for at least two years, who do we need to keep?

We focused on roles and responsibilities. The worst thing was that we had to let go some of our best people because they were the ones focused on the forward-looking systems. And we had to keep certain people we would have preferred not to because they knew how to keep the legacy systems alive.

It was an agonizing week. I’d go home at night to my four kids and my wife of 20 years and I’d think, How would I feel if I had to tell them that Daddy doesn’t have a job any more? I personalized it.

On the night of Oct. 3, I e-mailed the staff. We were a project-based organization without a project, and the layoffs would take place the next day. I explained how the process would work.

That morning, I sat in front of my organization in our final meeting together. I was crying. These were people I had hired and promoted. I knew their husbands and wives. I knew their kids. I knew their dogs.

There’s a cost to getting close to the people on your staff. That day, I paid the price.

The next day, I had a meeting with the survivors. I brought in a psychologist. We talked about survivors’ guilt—and believe me, it’s real. We all had friends that weren’t there. We talked about the importance of accepting what had happened. That it wasn’t our fault. That you have to allow yourself time to grieve.

Over the following days and weeks, I got about 100 notes from people I had fired, thanking me for being respectful throughout the process, for being compassionate. I got even more notes from people worried about how I was doing.

That day in October was the first time in my career I had to do something that ran counter to my core. At the same time, as an officer of the company, I knew it was the right thing to do.

The experience matured me. Last May, I started a new job where I’m building another high-performance IT organization. But this time, I’m not seeking such close personal relationships. I’ll always be an empathic leader; anything else would go against my nature. And I miss the work friendships I used to have. But we’re going through a lot of changes here, and I’ve learned it will be easier to approach those from a strictly business-driven perspective.

—As told to Stephanie Overby