Viral Layoffs: A Digital Dilemma at Cloudflare

Your supervisor got fired. The whole sales department sucks. We're going digital. Instead of that, we're putting AI to replace all of you. It could be a million reasons. We just don't have the money to keep paying you. But when you say something as far as a reason, it creates a big challenge.

How much more successful would you be if you had lunch once a week with insanely successful entrepreneurs who share their biggest secrets on how they think and achieve success? Grab your seat at the table because this is Business Lunch with Roland Frazier and Ryan Deiss.

Welcome to another episode of Business Lunch. And today's a snackable episode with Roland where he's going to get into some more tactical strategies that you can start using to live a rich and happy life. If this is the first snackable episode you're hearing, I'd encourage you to go back and listen to some of the other episodes that Roland has put out. And if you want to get notified every time we release a new episode, go to the new businesslunchpodcast.com website and we'll send you detailed notes along with every episode. That's businesslunchpodcast.com www.businesslunchpodcast.com and you can sign up for the free email newsletter where you'll be able to get all the highlights and resources from the episodes.

Hey everybody.

Roland Frazier and Ryan Deiss here with another episode of the Business Launch podcast. It is good to see you, Ryan, after not seeing you for minutes and minutes and then not seeing you for minutes and minutes before that. Cause we've been together for like two weeks now.

How you doing?

Two weeks. I'm definitely, definitely sick of you. I'm definitely ready. I'm definitely happy to be done with all of the, all the events. But you know what I'm most happy about? I'm most happy about the fact that I didn't get fired or I didn't fire somebody live on social media. Did you see this thing, this, this whole TikTok, this deal that blew up on like TikTok and Instagram where this, this woman who worked for Cloudflare got laid off and filmed? I did.

I did. And unrelated, did you see the little 15 minute meeting pop up on your calendar a few seconds ago?

Awkward.

Yeah, I guess she, she saw that they were firing people and then she saw the 15 minute meeting come up that she wasn't expecting with people she didn't know from Cloudflare and she figured it was going to happen, so she thought that it would be nice to record it and See what happened. Do you want to play it first or do you want to talk about that?

Yeah, no, I'd love to. I think we just play it. I mean that's, that's the setup right is somebody gets fired, they're filming it. I would love to talk about. Yeah, talk about on the other side just so everybody's got the context.

All right, let's see if our highly technical crew here can make things happen because I know you and I can't.

Hey Brittany.

Hi.

Yes.

I'm so sorry. My name's Rosie. I'm just joining the call. Nice to meet you. I'm on the HR team.

Hi Britney.

Hi.

Good way to start.

Thanks for meeting with me and Rosie. We have an important meeting today. We finished our evaluations of 2023 performance. This is where you have not met clap their expectations for performance. We've decided to part ways with you.

Yeah, I'm going to stop you right there.

Sure.

So I started August 25th. I've been on a three month ramp and then it was three weeks of.

I like she can self assess very well.

I have had the highest activity amongst my team.

I will tell you manager should be there during the firing.

Well I have ideas on why they didn't. What I get a kick out of that. She's a salesperson and she hasn't sold anything but she's decided that she's done a great job. But it's been a month and she hasn't sold anything.

Let's keep going.

It's a three she said three week ramp.

Every conversation I've had with him has he has been given me nothing but I am doing a great job. I have had great activity. I have really great meetings. I'm picking up the products very quickly and things have been going really, really well. I make really great relationships with my clients so I disagree that my performance.

So it's three months she's been there and hasn't sold.

Yeah, I mean I get, I get there's holidays but it's still a sales job. We'll talk about that.

Yeah, certainly have. Just because I haven't closed anything officially.

Officially. Which means she hasn't officially made any.

Money for the company doing this and not my manager. Not you know we've never met so this seems a little odd that my manager has no idea that this has been happening and the director has no idea that this has been happening. So I'm just definitely confused and yeah I would love like an explanation that makes sense.

100 real quick let me carve out the two threads, the ladder of why I'm on this conversation. I'll. I'll put that one. The second half. And Rosie might be better to explain.

Kind of get the. I don't know how long you want to let it run. That's.

Yeah, I think we get the idea.

Yeah, she does go.

She goes on to say that she wants a specific reason and is she being fired for no reason and things like that. And then I guess she's gotten quite.

A bit of support.

And I don't know what, you know, what other feedback has come. I haven't had a chance to read the comments. I saw, I saw it this morning. And I guess you want to start with the, the way that they chose to do it and her response. What do you think? What do you want to do?

Yeah, I mean, I think that. I think something doesn't go this viral. It really does take both people to kind of do something, kind of scurry for something to go this viral. And when I think about it, I think she's absolutely correct. I don't love the idea of somebody's manager not being on. I get that sometimes that happens, especially if the manager themselves are let go, then definitely that can happen. But to have it just be somebody from HR and nobody from that management team to be able to say that, I think that's a bad look. And even the CEO came out and said in a Twitter post, like, that's not okay. That shouldn't have happened. So, okay. Mistakes happen in, you know, in firing. I think the bigger issue is that when she said that, it was a surprise that all of her one on ones, she had gotten good feedback. That's definitely not okay. I'm a big believer that if somebody is getting fired, like, not just a layoff, like, but even then, there should be no surprise. People should know going into this. I actually wrote a blog post, how to Fire People with Fairness and Dignity, where that outlines a process for how you should go about doing this. And, and kind of rule number one is no surprises. That being said, again, just from an obviousness perspective, if you do have somebody who's been in sales for that period of time, even if there are holidays, it seems like it's probably not working out if they've literally made zero sales. And most folks who are in sales, they understand that when you're hired for a role, if you don't make any sales, that's kind of a make or break type thing. So I think it is that. What are your thoughts?

I Think it goes to her supervisor that I think a lot of people are uncomfortable with conflict and the supervisor needs to have the training to be able to give constructive feedback, which includes criticism. There's got to be. They have to be listening to calls or having sales meetings. She said she had gotten feedback, so they're good at giving feedback. It's just that if it's all positive, I absolutely understand why she was totally surprised. It. And as far as having the. So I think, you know, we can talk about that. I think that the. She was reacting. I'm not sure if it would have been better to give her more notice or not so that she didn't have to be in the kind of half angry, half, you know, disappointed state that. That sometimes happens when you. When you're let go and. And then to have two people telling her that she failed to meet performance expectations but. But she wasn't aware of it goes to. That just seems like some mismanagement there. I could definitely see that in a company like that. Why they would have HR do it versus the supervisor because of legal liability reasons that they have a process that they go through. And these people were letting go lots of people. So they basically said, this is our process. We're going to contain legal liability by doing it this way. It sucks. But having, you know, having seen the legal side of things as well, it really. You really don't want to give any more information. And if she had a relationship with the supervisor, they may have been concerned that the supervisor would have said, yeah, it does suck and you were doing great and blah, blah, blah, and. And completely supporting that position.

She chose to record this call separately, which.

Interesting. I'm not sure on the legality of recording as like a zoom call and publishing it because there are dual consent states and single consent states. So that's an interesting thing that she could potentially create liability for herself, violate the law there, particularly to have the two supervisors, you know, be broadcast. But on the other hand, why did she record it? Did she record it to create a potential legal claim against them? Did she record it so she could plan on putting it on TikTok? You know, it's like.

And.

And what does that say to her future employability? Because I'm never hiring that person. Like, you know, I got to think that the. You know, I don't know how many views it got, but it was a lot. Right? I got to think that any employer that sees that goes, man, that's very contentious. And sometimes things don't work out. Like, in terms of the giving a reason. We never give a reason because it's just your services are no longer required. If you give a reason, then you can potentially destroy your at will employment and create a liability because that, now there's a, an argument that somebody can make as to, you know, well, you said this, but I, you know, I did that and now you can fight about it. It's if you just basically say in.

Most states they're at will employment, you.

Can fire anybody anytime for anything you didn't meet expectations is actually more information than I would give too. And also kind of seems blamey, but, but your services are no longer required. It's like, well, I need a reason. You know, think about this too though, like as an employee, if you're working, people get fired for no reason all the time. We mismanaged our cash. We, you know, your, your supervisor got fired, the whole sales department sucks. We're going digital. Instead of that, we're putting AI to replace all of you. You know, it could be a million reasons. We just don't have the money to keep paying you. But, but when you say something as far as a reason, it creates a big challenge. So I'm with you on the. I, I think it could have been done in a better way. I don't think she should have been surprised. And I think that there's definitely things they could do better. But like for everybody that's an employee, I would say you're probably not going to get the honest conversation as to the real reason ever, because it just creates too much liability for the employer.

Yeah, you're not. Let me. So I'm going to attempt to give advice to the folks at Cloudflare, even though they're a bigger company than, you know, mine. But I'm going to do my best for the sake of everybody else. If this happens again, make sure the person should not be, I mean, anytime. I have unfortunately had to let a number of people go. I've also had managers reporting into me that wanted to let somebody go. My first question, if a manager comes, hey, we need to fire this person, is okay, I understand. Are they going to be surprised by this? And if the answer is, oh, well, you know, then it's like, okay, well then here's what you need to do. You need to go put them on a performance improvement plan. And probably if they've been working for you and this has been an issue for a while, you should have done this a while ago. And so I want you to put them on a performance improvement plan. And here's what that looks like, you know, and we've got a whole process for that where they're going to basically be strictly like micromanaged and need to hit certain objectives.

They're going to be informed that if.

They can't hit those objectives then, then that'll be it. Right. And it's, it's theirs to win back. And it doesn't necessarily mean that, that this is how we've had plenty of people go on performance improvement plans that did improve their performance and become absolutely frigging rock stars. Yeah, I would talk to the manager about doing that and then I would let the manager know, you're going to be put on a performance improvement plan because you're not doing what you need to do as a manager. Assuming of course, we had taught them how to do that. And so all of this assumes before you let somebody go, the first question to ask is, did we put them in an environment to succeed or is this our fault? If it's your fault, then you need to make the correction on your end. Have a conversation with the team member about how you're not performing. We believe it's on us. Here's what we want to do to support you and look to resolve it at that point. If it's clear that it's on them, then there's a corrective conversation. Performance improvement. And then if that's not working out now, it's, hey, unfortunately today's going to be your last day at the company. As we discussed before, the, those core metrics weren't being met. We can have a conversation but I'm not going to say any more beyond that point. I do want to let you know that this is how it's going to work moving forward. And that's when you just get into the here you can still apply for unemployment. Here's what your health. And you just go into that. And if they, if they keep asking what was the reason, I can't give you any more. I agree with you. I want to give them all the reasons in the world. Yeah, you just can't.

Yeah.

And we, that's how it should have been done.

We had this happen as recently as a couple of weeks ago with one of our portfolio companies where there were, there were some people that needed to be let go and they did not follow our advice, which is, and I learned this the hard way, which is basically now this was a remote position and it sounded like she said it was a, a three week ramp in the thing, but it said three month Some other place. So I'm not sure what it was. She said she started in August, so, so she. Okay, so she, she had three months to kind of prove herself. So she was already in a position that she knew was going to basically be. Maybe at the end we're happy and maybe we're not. So I think starting out contentiously is not going to help because I instantly want to fire you the minute that you start arguing with me and not letting me talk. So she said, no, let me stop you right there, you know, And I again, had. She had noticed and it wasn't a surprise. Maybe it would be better. But I think that just on both sides, you need to keep it as professional as possible, no matter how much you may feel it is wrong, you know, on either side. And. And then there's the opportunity to ask for support. Now in that environment, my guess is that there was no way that there was anything she could say that would get her job back. So the only thing she can do is basically have a negative experience. The people that are firing her, they don't have any authority. They've been. Their job is to fire 100 people or whatever. So I think it's important to think about that. Her way back in, without having been contentious, might have been to reach out and say, you know, look, here's the status of all the calls I made. I know things didn't close, but I never got support on how to do that. Could I have a performance improvement plan would be probably the most productive question that she could ask.

Right.

Which.

Which doesn't happen if you interrupt them. And so, like, if I'm. I gave advice to Cloudflare, I'll give advice to her. By the way, nobody asked for this advice, which I fully recognize. But from her perspective, as hard as it is, you gotta hang in there and just hear it out. Especially, I'll tell you, I would never hire this person for a sales role. Cause a big part of sales is keeping your cool when things get kind of tough. And I get that it's tough. That's one of the toughest conversations in the world. I absolutely empathize with their position. But when you're like, let me stop you right there, there is no going back from that. You've just decided to light everything on fire. And it doesn't mean that they didn't, quote, unquote, deserve it. But at that point, it's not about them, it's about you. And so for your own self interest, let them speak. Let them be heard. You can Always drop the nuclear bomb, which is why it should be your last. Go nuclear at the end, not 30 seconds into the conversation.

It also goes to the importance of data on both sides, because for her, for, you know, you and I listening to it, we said, well, three months with no sale. No matter how much activity you have, you can have a lot of activity, but if your activity is not productive, ultimately our company lives or dies based on income. Income comes from sales.

Your position is to sell. You didn't sell for a quarter of a year.

That, that's a challenge. Now, if the sales cycle is six months, then they didn't give her a fair amount of time. And if, if you are going in, like if I'm her going into the job, get all the information as to what success looks like and what reasonable.

Periods to achieve specific results look like so that you then have data to support.

Because then all along you can say, hey, I'm three months in, but I know our sales cycle is six months.

Where should I be?

What are the leading indicators that I should be meeting to know that X percent of my quota is going to close within the normal sales cycle time? That would be a really good thing for you to know because then if you're having conversations with your supervisor, you can be your own advocate. But you like what she did several times was she said, I'm doing a good job. And it's like, okay, but you don't get to decide that. Right? Yeah, that's not relevant at all what you think.

Yeah, the customers would disagree because there ain't none. And so but to your point, yeah, it does depend on that. The entire conversation was emotional and that's the nature of a firing. It just is. I would just say both of them could have handled it better. Both of them could have done things differently. For the employers out there, if you're listening to this, what you need to know is you need to assume that anytime you are going into one of these situations, you need to assume the person on the other end is absolutely going to record it and they're absolutely going to post it to TikTok. We just have to assume this, this wasn't. There was another woman the same week who was laid off from Discord and.

She did the same thing.

She's like, I'm pretty sure. And in this case didn't say anything negative about them. It was just a very kind of sad video. But I think this is the world that we live in. You need to assume that it's happening. Which only means by the way you need to do what you know you need to do anyway. Right? I mean, this should just serve to keep us honest. I agree with you. I don't think it's necessarily right, but maybe we're the grumpy old guys yelling at clouds. Well, I'll tell you what I will.

Do, though, is I don't think the company and its policies and procedures were done correctly. Based on what we talked about and also based on the result. I don't think that. I think that the company could have done it better, and I think that she could have done it better. But I think the two people that we're interviewing who I believe were tasked with doing exactly what they did, stuck with the policies and procedures, whether they agreed with them or not, and they performed perfectly within that. Because I didn't see them say anything that created liability. I saw them try to say, I understand, I know how you feel. Try to be empathetic. Even though, you know, I think it was hard to sell after you fired 26 people the 27th. You're going to have a hard day. I totally understand how you feel. You know, it's just they. They were maybe not quite as enthusiastically empathetic as they could have been, but. But for them, the exact reason that you can't give all that information and the exact reason they needed to stick with their guns and not go off script was. Was evidenced by the fact that she recorded it and posted it, and it could have created all kinds of liability for them. So I think. I think they did it right, even though it fell apart at the corporate level.

I agree, and I'm glad that you said that, because they caught the most flack in the comments. They were, like, called corporate drones. And, you know, the. The 2hr people, when at the end of the day, I think they were the only ones that they did their. They did their job like it was supposed to be done. And you can say, that's cool and say that's cold, and you can even.

Say they're corporate drones.

And they.

And they might say, you're right, we were. But you know what?

We're still employed. Yeah. Yeah.

I did my job. This is what I do. What you do is sales.

You didn't. What leadership should have done was lead. They did it.

Yes.

The only contingency, this whole thing that did their job was the one that got crapped on the most. And I'm so glad that you said that because nobody else is defending those two people. I think they were put in a tough situation. I Think they were their job. They did it. But God dang it, y' all get have a firing process in place. People talk about, you know, the importance of hiring and having a good hiring process in place. What will make you great at hiring is getting good at firing. It sucks, but it's a critical aspect of the role. And the better you get at firing and the more you realize, okay, people come in, they cannot work out.

We can send them on their way.

And it'll be okay. The more confident you'll be to make the hires in a timely manner.

Yeah, and I don't know if they.

Did or not, because we don't know if they didn't communicate to her when she was hired. This is a period of time within which you're going to prove yourself. And to us, the expectation is that you will, within this period of time, close this many sales. Then you have an objective thing that you can point to and say, three months, you didn't close. We expected. We told you when we hired you, it was a temporary position. You could even go so far as to say, look, most of the people that we hire for sales don't work out because we're looking for very special.

People that can close deals.

Doesn't mean you're good, wrong, bad person, anything like that. It just means that you're not right for the position.

Most people aren't.

We hope that you are. The only way for us to find out is to hire a number of.

People, put them out in the field.

And see how they do. So you're creating that expectation from the get go that this is not like, you know, she seemed to think it was like, I should be employed forever, you know, but that's not the case. In those jobs, we hire lots of salespeople knowing most will fail. But that's just the nature of sales. And so I think if they didn't communicate, they needed to, they may have, and she just forgot, you know, in the moment. But that's something else. I'd say it's true.

We're crap on our manager. Based on one person's testimony, it's possible her manager was giving constructive feedback. And sometimes people don't hear it. They don't listen, they don't remember it, but it just shouldn't be a surprise.

Yeah, just don't surprise people. And if you like this episode of Business Lunch, create a firing process. Create a hiring process, Keep people communicated with and share this with anybody else that you think might benefit from it. And we'll see you next time.

On Business Lunch. Hey, Roland Frazier here. If you're looking for a way to grow your business exponentially to get more customers and ultimately increase your wealth, there's no faster way to do it than to acquire other businesses that already have the customers, products, services, teams and media that you want. If you want to double your sales, just acquire a company that has the same sales as yours. It sounds simple, but far too many people end up starting new businesses that fail and forget that they could skip all the hard stuff and just acquire one that already exists. There's a reason why private equity firms, family offices, big companies like Apple, Google, and some of the smartest entrepreneurs on the planet do not start new businesses from scratch. They acquire already successful businesses and when they do it, they instantly increase their sales, their profits. If they want market share, they increase that, they can get new products and services to offer all instantly. Hey look, 90% of new businesses fail.

90%.

Why not acquire an already successful business and increase your chances of success by 900%?

What most people don't realize is you.

Can acquire highly profitable businesses with no.

Money out of your own pocket in.

Pretty much any country in the world, regardless of your credit, and without having to go find a bunch of investors or needing any experience. Look, I've been acquiring businesses for over 30 years now, and I cover the whole process in my EPIC Investing Strategy training and I want to give it to you 100% free.

Just visit businesslunchpodcast.com epic to get your.

Free access to my EPIC investing training.

Right now while it's available.

Ever wonder how some people build real wealth through acquisitions while others just sit on the sidelines? Well, I'm here to tell you it's not about luck. It's about having the right system, the.

Right deals, and the right guidance.

And that's exactly what we give you in the EPIC Deal Fast Track. If you've been thinking about buying a business, but you keep getting stuck, whether it's finding the right deal, structuring the financing, or negotiating with sellers, you are not alone. Too many people waste months, even years just thinking about acquiring a business while the real opportunities pass them by. The EPIC Deal Fast Track is not another course. It's actually an implementation program. And it's designed to get you from the idea to the acquisition in just 16 weeks or less. We work with you one on one to help you find, fund and close your first or next deal. And once you do, we're going to plug you into our elite EPIC board community so that you can keep scaling through acquisitions, we install three powerful systems in your business. The first is the deal flow engine so you always have high quality off market deals coming to you. Number two, we give you our offer and funding system so that you can structure offers that get accepted and fund them to creatively many times with no money out of your own pocket. And number three are closing and integration systems so that you don't just buy a business, you actually successfully run and.

Scale it once you have acquired it.

Plus you'll have direct one on one support from an Epic deal advisor every step of the way. And that's people that have actually come up through the system and done these deals themselves. That's the only way to become an Epic Deal advisor. And if you're serious about acquiring a business this year, don't just sit on the sidelines. Just text I'm in to 334-458-9034 and we'll get you in. So text I'm in to 334-458-9034 will get you in. No fluff, no wasted time, just real deal making from people that are actually out there doing deals right now.

I'll see you there.