PayPal president David Marcus announced layoffs in his division this week with a tone-deaf line about delighting customers and providing great experiences.
Never mind the 325 employees and 120 contractors who are going home without jobs this evening, and who could be facing months of unemployment, family stress, financial hardship, and more. Our focus is on the customers!
And that’s just two weeks after Paypal’s corporate parent, eBay, said the payments division was knocking it out of the park, with revenue up 23 percent compared to the previous year.
Marcus is a decent guy, according to at least two VentureBeat reporters who have talked to him. I don’t think he’s cruel or unusual among his peers: He is certainly not the first tech executive to handle layoffs in such a cavalier manner, and he won’t be the last. For example, last week Salesforce laid off 100 people in its Marketing Cloud division and led its statement to the press with bold words about how it “is the undisputed leader in social marketing.” This, just a few days after rolling out new features for Marketing Cloud and claiming that 55 of the Fortune 100 are using the service.
The playbook seems to be: Announce a new product. Tell the world how it’s raking in money hand over fist. Then quietly let go a chunk of the people who made it happen.
This approach does nothing to endear companies to their customers. More immediately, it runs the risk of demoralizing the remaining employees. Sadly, it’s all too common in tech companies and is a sign that the industry is getting seriously out of touch with the rest of the world.
Now, I get it. Not every company can boast that its revenue and profit graphs go straight up and to the right. It’s a rare company that doesn’t run into financial difficulties and have to lay people off at some point. Fortunately, many of the people eBay let go are in product and technology roles, which means many of them will likely find new work quickly, assuming they’re based in Silicon Valley, where software engineers and product managers are in high demand.
But really, people, there’s a good way to do this and a tacky way. For a chief executive to focus on the customers and not the people he’s laying off is insensitive at best.
At worst, it telegraphs the message that the tech industry can afford to be cavalier about jobs. Laid off? Get another one! If you’re lucky, it’ll be one where there’s a chef to cook you lunch every day or a policy for unlimited time off. Can’t get hired? Just start a company! Just make sure it’s one that delights its customers.
You have to wonder how PayPal’s customers in other parts of the world, where unemployment often floats well above the U.S.’s 7.8 percent nationwide average, feel about that kind of attitude.
Maybe they don’t care — many customers don’t pay that much attention to how a company conducts itself. But everything a company does reflects, subtly or not, on its brand. A move like this casts PayPal in exactly the same light as the banks and credit card companies it competes with: impersonal and concerned only with profits.
I submit that a better way to announce layoffs is with humility and with an acknowledgement that, somewhere along the line, the company and its executives screwed up. Let the responsible execs take a cut in pay, and make that part of the announcement. (I asked eBay if Marcus was taking a pay cut, but got no answer.) Apologize to those who lost their jobs, talk about how you’re helping them find their next gig, and thank them for their contribution.
Then talk about how you’re still committed to deliver amazing experiences to your customers.
VB's research team is studying web-personalization... Chime in here, and we’ll share the results.