'Zoom firing': Are virtual layoffs the future?

Some companies have laid off workers via group video calls. As remote work proliferates, workers may need to get used to the idea they could be fired virtually.

In recent months, there have been several high-profile cases of companies terminating large groups of employees via video calls or other virtual communications.

In December 2021, US mortgage company Better.com fired 900 workers over Zoom. "If you're on this call, you're part of the unlucky group being laid off," CEO Vishal Garg told workers. “Your employment here is terminated. Effective immediately." Six months later, US used-car company Carvana let 2,500 workers go in a similar manner, some during group Zoom calls, some via email. At Swedish fintech company Klarna, also in May, the CEO announced 700 job cuts in a pre-recorded message, after which workers had to wait up to 48 hours for an email telling them whether they were part of the affected group.

Companies may have had particular reasons for using the processes they did: the pandemic, slowed growth and rising labour costs have forced some firms to downsize, and group calls are an effective way to deliver bad news to large numbers of affected workers. But overall, these collective, virtual layoffs generated bad publicity and left staff angry.

"My heart just sank. I haven't been a part of something like that before," one Better.com employee told the BBC in December. “It was very callous.”

Large-scale job cuts have always existed. And in the new remote-work world, in which we increasingly use technology to communicate, it makes sense that those who are hired and work virtually might also get fired virtually. Yet mass ‘Zoom firings’ make headlines; to devastated workers, the news can feel like a compassionless blindside. There’s no one-to-one chat in a side-office, no way to ask questions or process what's happened in the way there is with an individual, in-person conversation.

Yet virtual layoffs may well become more standard in the remote and hybrid world, because of the new ways we’re working. But experts say cutting jobs and the people who do them can be done more considerately, helping soften the blow for affected workers.

No personal touch

Part of the reason mass ‘Zoom firings’ feel so egregious, says Hayden Woodley, associate professor of organisational behaviour at Ivey Business School, Western University, Canada, is because they represent “a combination of two bad practices that shouldn't be done in the first place": firing people in groups and without a direct conversation.

Both of those practices can make losing your job – an already devastating experience – even more miserable, because "both are going to be perceived as lacking procedural justice", says Woodley. Workers may expect certain processes when getting terminated: a specific explanation from their boss, a certain period of time to wrap up any affairs, a chance to ask questions. But with mass 'Zoom firings', none of these are guaranteed.

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Group firings rob affected workers of the individual touch, says Johnny C Taylor Jr, CEO of the US-based Society for Human Resource Management (Shrm). Plus, he believes remote firings lack a certain dignity, since "you don't have the advantage of the human dynamic, where you can grab the person a tissue box if you see them tear up".

And while getting laid off in any circumstances can be a huge blow, being shown the door in this way – remotely, abruptly and as one of many – can make workers feel even worse.

Of course, companies are grappling with all the changes the pandemic has brought; firms are still figuring out best practices for navigating layoffs in workforces that increasingly operate remotely or on a hybrid schedule, and that communicate with asynchronous technology.

Plus, fewer workers now have regular in-person contact with their managers, or spend time in their offices. So, if the time comes, the boss letting the worker go remotely could well make sense logistically and in the context of their relationship. It doesn't make any sense, says Taylor, to force workers to "fight traffic for 90 minutes to come in and be terminated in a five-minute conversation".

Nicholas Bloom, professor of economics at Stanford University, US, concurs, saying: "Zoom layoffs are totally reasonable in a world where employees are recruited, trained and working mainly or fully online. Indeed, for fully remote jobs, it would be very odd if the one time you met your manager was for them to fire you." Yet this isn’t a blanket feeling: Bloom also believes mass layoffs affecting hundreds of employees – either online or in-person – is "cruel and absurd".

Jennifer A Chatman, associate dean for academic affairs at Haas School of Business at University of California, Berkeley, believes the only reason companies might opt to lay swathes of employees off in a single call is “for short-run efficiency”.

“A quick Zoom call attended by all the people a company is targeting to lay off takes five or 10 minutes, compared to other approaches that would involve more individualised meetings and in-person," she says. Firms only have so many HR staff, after all. "Of course, the key here is ‘short-run’. While companies might see this approach as somehow advantageous from an efficiency perspective, it is problematic in all sorts of ways."

The follow-up conversation

In cases where firms do opt for a group announcement, execution is key. Woodley believes that ”virtual isn’t the problem”; instead, it's the way the termination is conducted remotely that can cause issues. Even if layoffs happen over Zoom or email, there's no reason the same technology can't be used to make the transition less painful.

"With people working from all over, I don’t see how a meeting cannot be set up to follow an email about the termination and [give] people the opportunity to respond," says Woodley. In other words, it's crucial to follow a group announcement by senior management with individual conversations with affected employees to answer questions and talk about next steps.

"Bringing groups of people onto a call to experience something that is so jarring is not good form," says Taylor. While he believes it's OK to bring an organisation together to announce redundancies or restructuring, it's crucial to "then have individualised conversations, even remotely, with the impacted employees so that people can experience, respond to [and] digest a separation discussion one-on-one".

These personalised conversations can be especially important in a depersonalised setting like hybrid or remote work, where workers may spend all day alone in their home office. And even if the numbers of affected employees are very high, meaning HR representatives cannot take all meetings, it’s crucial that direct supervisors make themselves available. "We've got to train our managers to be more empathetic and compassionate in the process… especially if you're doing it remotely,” says Taylor.

Companies can also try to soften the blow by helping workers identify potential new opportunities. Employers can say, "'Companies A, B, C and D in the area are looking for talent, and we can make that intro for you'," says Taylor. Not only does it help the terminated employees, it's also good business for the company – it shows prospective hires and those who survived the layoffs that the company cares about its people, potentially alleviating the morale hit layoffs can bring.

Getting things wrong can leave companies with questions to answer. Better.com CEO Vishal Garg subsequently apologised for the way he had “blundered the execution” of the layoffs. He took a brief hiatus from the company, which has since laid off more people, reportedly again with some issues. Carvana told CBS MoneyWatch it had "as many conversations as we could in person [about the layoffs], and where in-person was not possible, we spoke to our team members over Zoom". Klarna’s CEO defended his handling of the layoffs, reportedly suggesting 48 hours was an "acceptable" time for employees to wait for bad news.

Given remote and hybrid work aren’t going anywhere, it seems likely that virtual layoffs will become a normalised part of our working lives. Working from home, says Taylor, has altered every stage of having a job – including the end.

Yet, as recent cases have shown, companies will need to develop processes to conduct redundancies in a way that workers feel is humane. "The Better.com example was a good warning to other firms, and so I expect that most will try to use a little more common sense," says Chatman. Workers shouldn't get too comfy, though: "there are always outliers," she adds.

But, as with many things, the way companies will proceed comes from management and their priorities. "Hiring, training and working with people is always personal – we never have mass hirings," says Bloom. "Firing and layoffs should be the same."