REUTERS
"There's no good way to do a layoff," a Thursday memo to Stripe employees read.
Still, Patrick and John Collison, the cofounders of Stripe, laid off 14% of the payment company's workforce in one of the best ways possible.
In their memo to employees, the brothers, who started the company in 2010, took full responsibility, apologized, provided transparency, and announced a generous severance plan.
Stripe's memo contrasts with how some other technology companies are undertaking layoffs. On the same day the Collisons shared their message with employees, Twitter sent an unsigned memo to its workers announcing sweeping layoffs and office closures. The note went into little detail, and later that night some employees were, to their surprise, locked out of company Slack and email accounts before receiving any formal notice of their termination.
Some former employees, among others, have criticized Twitter's approach to the layoffs; one group of workers even filed a lawsuit. Meanwhile, many workers are praising Stripe, publicly and privately.
In one case, employees at the human-resource platform Compt discussed Stripe's memo in their company Slack. They said the note was "well-done" and a great example of taking accountability.
"For an extremely tough decision, I have great respect for how Patrick and John Collison handled the situation," Joe Alim, Compt's vice president of product and operations, told Insider in a written statement. "The leaders are taking full ownership of the consequences of their decision and truly showing compassion towards each employee by offering them a well-thought-out and generous severance package."
Stripe's memo told laid-off employees they would receive pay until at least February 21, 2023, annual bonuses for 2022, pay for unused time off, healthcare for six months, accelerated stock-option vesting, career support, and immigration-services support for visa holders.
Additionally, while the note indicated that aggressive hiring and tough economic decisions influenced the layoffs, the Collisons primarily placed the blame on themselves as leaders. Patrick Collison serves as CEO, while John Collison is president.
"In making these changes, you might reasonably wonder whether Stripe's leadership made some errors of judgment. We'd go further than that. In our view, we made two very consequential mistakes," the memo read. The note went on to state that they were "too optimistic" and "grew operating costs too quickly."
Layoff processes are "the ultimate test of a leadership team's empathy," Justin Schmidt, the vice president of marketing at Compt, told Insider. Schmidt has worked on layoffs, which those in the business world often refer to as "reductions in force," or RIFs. "People's lives get changed because of layoffs, and the entire process from decision through post-RIF support needs to serve one goal: Land them on their feet with their shoulders square and heads held high."
Stripe's memo praises the laid-off workers, stating that they would make "fantastic additions at almost any other company." Additionally, the company is creating "alumni.stripe.com" email addresses for laid-off employees and creating a new discounted tier for those who would like to start their own businesses and use Stripe's products.
"This was handled, in my opinion, the best way possible," Amy Spurling, the CEO and founder of Compt, said. "Everything that needed to happen, happened."
