Ariel Cohen’s decision to fire 100 employees during a video conference is controversial, but might also reflect the new reality of remote workforce management.
Marketing, events, and recruitment departments fell on the sword at one of the fastest growing corporate travel technology companies this week.
And the coronavirus crisis also put a halt to TripActions’ ambitious plan to double in size this year, its CEO told Skift.
On Tuesday, Ariel Cohen took to video conferencing to lay off some 100 employees as part of a wider cull of almost 300 staff. This controversial method attracted criticism on social media, but Cohen said there was no other choice.
“Doing it by video conferencing is probably the most horrible way to fire someone, because you do need to have the courage to look at somebody in the eye when you’re doing it. Doing it over Zoom was really, really bad. But right now we couldn’t bring them to the office,” he said on Friday.
“We’d hired all these people as part of the TripActions journey, so it was a sad thing to do. It was awful … these are good employees, and it wasn’t performance-related.”
Despite the controversial technique of letting staff go, Cohen believes TripActions will not be the first company to do this.
“We’re kind of writing the book right now on how to do it. Our approach was first, let’s bring everybody to a conversation, and share what we are going to do. Then have a personal meeting with each of the managers; that’s what we did throughout the day on Tuesday.
“I called roughly half the people who were fired and just apologized. There’s not much you can say, and it’s a really bad process.”
The boss of a company that was recently valued at $4 billion said he leaned on the board for advice prior to the redundancy announcement.
“My board has probably the top investors in the world,” Cohen said. “You have someone like (co-founder and investor) Ben Horowitz. He was building companies during the September 11 crisis, so he has a lot of knowledge. Even on Monday, I called him to coach me on how you lay off a lot of people. He has lessons. It’s valuable to have someone like him on the board.”
Why the cuts?
As well as corporate travel grinding to a halt, the sudden downsizing related to recent investments TripActions had made in building up its marketing teams — an activity that has now been put on hold. With social distancing now the new norm, staff who organized events also were dismissed.
The company’s recruitment drive was also closed down, while a sales office in Chicago that only opened a few weeks ago was shut. “There are good sales people, so we offered relocation,” Cohen said. “It’s one thing to manage a company over video conference, but building something new over video conference is impossible.”
Cohen added that despite Tuesday’s layoffs, the rest of the board “believes in our mission” — but predicts a rough year ahead followed by recession
“Up until three weeks ago, our plan this year was to double the company… the point here is that you have to adjust the business to the new reality,” he said.
However, the CEO remains optimistic for the future with “cash in the bank” and customers still signing up. He added yesterday (Thursday) saw TripActions sign its largest customer to date, and that the doors are open for any affected staff once the company pulls through.
“After, if laid-off staff want to come back, the answer is — hell yes,” Cohen said.
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Photo Credit: TripActions CEO Ariel Cohen has defended his move to announce wide-scale redundancies via video conference TripActions