We love the way AOL CEO Tim Armstrong is handling the company’s latest round of layoffs before its December 10 spin-off from Time Warner (TWX). He’s communicating with employees first, cutting deep, and offering buyouts.
But a source familiar with their execution tells us this last piece — the voluntary layoffs — were not a part of AOL’s original plans.
At the end of November, AOL management told employees it needed 2,500 to step forward and fire themselves.
To encourage quitters, AOL created two severance packages — one for those who quit before the company’s spin-off, and one for employees involuntarily laid-off during the first quarter 2010.
This is a smart plan because voluntary layoffs 1) encourage people who don’t buy into AOL’s new strategy to quit, and 2) give employees who decide to keep working a renewed sense of investment in the company’s future.
But originally, AOL planned to cut 2,500 the old-fashioned way: by surprise, and in Q1 2010.
Plans only changed when a team, tasked with asking employees themselves who should stay and who should go, advised management that morale among employees would be much higher if they were allowed to choose for themselves if they should stay or go.
As employee-centric as AOL CEO Tim Amstrong seems to be, neither he nor the rest of AOL’s top management intially wanted to do this year’s layoffs the employees’s way. Their concerns were that volunteer layoffs are more expensive, and that talented people AOL would never fire on its own would quit.
Give Tim and company credit for making the right choice in the end.
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