You know it: Preparing for layoffs will be \n\na key part of the job for many CIOs in the months to come. Economic upheaval forces cutbacks \n\nin projects and people. Need a history lesson? Look back to the dotcom bust, then consider \n\nthat the current financial mess touches many more industries and many more countries.\n\nMore on CIO.com\nHow to Recession-Proof Yourself\n\nHow you lay people off says a lot about you and your organization\n\nHow To Find, Fix Or Fire Your Poor Performers\n\nShowing good workers the door when business contracts is one of a leader's toughest \n\nassignments. The key to getting your department through layoffs with minimal damage is to \n\ndownsize thoughtfully and decently. (Read "Why Talent Management Matters").\n\nDoug Cormany, senior vice president and CIO at Preferred Care Partners, a \n\nMedicare Advantage Plan headquartered in Miami, has laid off technology staff a few times \n\nduring his 30-odd year career as a CIO at the staffing firm Spherion and at the equipment \n\nrental company formerly known as NationsRent, among others. He never likes the task. What he \n\ndislikes even more are those instances he's seen of IT leaders doing it badly. Cormany, a \n\nmember of our CIO Executive Council, spoke with CIO magazine Senior Editor Kim S. Nash about \n\nthe right way and the wrong way of telling your people they've got to go.\n\nCIO: IT layoffs have already begun. But not every CIO does it well. What's your \n\nexperience with handling this kind of bad news?\n\nDoug Cormany: I do that as part of doing turnarounds. At Spherion, for \n\ninstance, we had numerous disparate systems and we knew that once we got over to PeopleSoft \n\napplications, we would have a reduction of workforce. So over the course of two years, I had \n\nto let go 152 information technology services people. I outsourced [another] 63 people. \n\nThat's the biggest layoff I've done.\n\nHow did you figure out who would stay and who would go at Spherion?\n\nWe did an assessment of the skills of each IT employee. We had each one assess his own skills, then we had supervisors assess each \n\nemployee. We had the next level\u2014the directors\u2014look at them. We also brought in \n\n[management from the] business, to ask them about the people we had assigned to them.\n\nOnce we had that process finished, we said, "What is the 'to be' organization going to look \n\nlike in two years? What skill sets will be needed? What did the job descriptions look like?" \n\nThen we started placing names in each position.\n\nWhat happened to those employees whom you didn't slot for a position?\n\nWe asked ourselves the question: Do we need them to maintain old systems while delivering \n\nnew systems? We were up-front with people. They knew at the beginning of the project that \n\nthey were [either] working themselves out of a job or working themselves into \n\na [new] job.\nWe sat with each employee and gave them three months' notice, six months' notice, nine \n\nmonths' notice, as the project was done in phases. In addition to giving them notice, we \n\nalso gave them reasons to stay. They would get X number of weeks per year of service, if \n\nthey stayed through the end of their assignments.\n\nWhat else did you offer?\nJob assistance, which entailed working to find them new positions in other companies or \n\nwithin Spherion but out of IT. A couple of people did move out of IT into the business. If \n\nthey wanted it, we sent them to career counselors within the Spherion business unit.\n\nWho conveyed all this news? You?\n\nEither myself or my directors or VPs would meet with them, with human resources. HR was in \n\nstep with this all the way.\n\nWhat goes into the employee assessments?\n\nWe look at everything from their education, courses they'd taken on the technology or \n\nbusiness side, to applications they'd worked on. Technical skills, management skills, \n\npartnership skills. They had to rank themselves [as] good, better, best in each area. Then a \n\nsupervisor would meet with them [and we know that] somewhere in the middle is the truth, \n\njust like with a performance appraisal. We got an agreed upon assessment and we noted if any \n\n[items] were not agreed upon. We knew after the assessment who wanted to learn and who \n\ndidn't. Read: "How to Recession-Proof Yourself"\n\nHow did you develop this method?\n\nI've been in this business well over 30 years. This is something I had to learn early on. In \n\nmy 20 years at Disney, during the fuel crisis of the 70s, I had to let a lot of my people \n\ngo. I learned how to try and take the emotion out.\n\nDifferent people take it different ways. This is the hardest type of severance. Disciplinary \n\nactions are different. But at Spherion we just went to a new technology and fewer \n\napplications to support. I'd say 95 percent to 98 percent of the people were OK.\n\nHow could you tell?\n\nThey didn't leave. People still worked on these projects and kept old systems running and \n\nworked the 10- to 12-hour days, six days a week during this hard time. They showed up and \n\ndid a good job. We were meeting all delivery dates. We met every one. We only lost a couple \n\n[of people].\n\nThey went off and found other jobs?\n\nRight. Throughout the two years&some people whom we had questions about shined and some \n\npeople whom we thought were keepers ended up not catching on to the new technology as well \n\nas we thought they would.\n\nHow do you explain that?\n\nI don't know if you can. I don't know if they applied themselves more or enjoyed learning \n\nnew technology. Some people\u2014there's nothing wrong with this\u2014but some people just \n\nwant to be a heads-down programmer.\n\nHow did you deal with discouragement and morale issues along the way?\n\nCoaching from management. At our monthly town hall meetings, we answered every question \n\nasked by any member of the team, no matter what. We always made sure to speak openly and \n\nfreely, and to have fun. And sometimes, you make a decision to part ways. We did have a few \n\nof those, but very few. When you have to let people go, it is hard.\n\nWhat layoff mistakes do you see getting made by CIOs?\n\nThe biggest error a lot of people make is they don't look at the "to be" organization. Know \n\nwhat you want to be, because [otherwise] the morale of your IT organization will deteriorate \n\nand you'll lose productivity.\n\nI hear of companies that lay off 10 people this week, then five more the next month. \n\nEveryone's in fear for their jobs then. If employees see that every month there's a black \n\nFriday, they're going to be out looking for jobs. The best thing you can do is work up a \n\nlayoff plan. Then deal with it: Do it once.\n\nWhy does that mistake happen?\n\nAs companies are losing revenue, they often don't know what they need to do. But they do \n\nknow they have to cut expenses. So they go from department to department and say, "We need \n\nyou to cut five percent of spending." Next quarter, it's another five percent to 10 percent, \n\nuntil sales recover. Those are hard times.\n\nHow do contingency plans usually work?\n\nA Plan A is best case. 'We hope the trend is going to be this' and there's a foreseeable \n\nuptick. A Plan B would be a 20 percent decrease [in spending] from Plan A. At my last three \n\ncompanies, probably 65 percent of [IT] costs couldn't be cut. It's things like maintenance, \n\nutilities, software licenses. Those are fixed. So that leaves travel, personnel and new \n\nprojects. And training. Unfortunately, we always cut training. It's always a big target.\nA Plan C is the worst case. If things really get bad, you're not going to do new innovation. \n\nYou won't be able to get capital spending. So the people who are going to have to find new \n\njobs are those who are working on the new stuff.\n\nHow are you doing in this current economic chaos?\n\nMy company is not so affected right now because our revenues are from Medicare. But our \n\nemployees still feel it. With their spouses' jobs. With clothing, food. It takes a toll on \n\nproductivity. We're all talking about it. Think about all the money companies are losing in \n\nproductivity. I just announced two new projects. That keeps things going. I've been on the \n\nlucky side this time.