LTC#11 - Preparing for Downsizing a Team

How to approach assembling a list of people to let go? What are the main criteria to guide your decisions? How do you balance business needs with team health during a difficult transition like this?

Hi, this newsletter is a weekly challenge for engineers thinking about management.

I’m Péter Szász, writing about my engineering leadership experience on my blog, training aspiring and first-time Engineering Managers on this path. See more about what I might offer you at leadtime.tech.

In this newsletter, I pose a weekly EM challenge and leave it as a puzzle for you to think about before the next issue, where I share my thoughts on it.

Last Week's Challenge

Last week, we explored a tough situation where an Engineering Manager was asked to reduce their team size by two people. Read the details here if you missed it.

I'll approach this situation in our standard three steps:

Goals to Achieve

Execution: I shouldn't fight, let alone sabotage the task. Instead, I should show clearly the impact of downsizing on our team’s commitments. This includes effects on our roadmap, services to other teams and customers, on-call rotation, etc. I have to collaborate closely with the Product Manager to determine what this smaller team can realistically produce in the future.

Team/Organization: Keep the balance and diversity of the team despite having fewer people. This includes maintaining a mix of seniority, expertise, and tenure. Teams should be set up to solve tomorrow's problems, not just today's, so I need a forward-looking vision: what’s the best team setup to successfully execute on a reduced scope?

Personal: Handle the process with dignity and transparency. People will remember how their departing colleagues were treated, shaping their own sense of security and loyalty. I need clear, objective criteria for my selection that can be shared with the team later.

Risks to Avoid

Execution: Promising the same outcomes with reduced capacity would set the team up for burnout and failure. Neither is desired nor sustainable. We'll need to delay projects, or even better, cut the scope of delivery.

Team/Organization: Making selections based on personal bias, convenience, or purely short-term thinking could critically damage team capabilities. For example, cutting only less experienced people might seem the less painful decision, but it would be short-sighted because team seniority would be out of balance, potentially causing motivation-related problems in the future.

Similarly, and somewhat counterintuitively, I should not make my decision based mainly on performance. If someone performed below expectations, I should’ve dealt with it already. This is an externally-triggered multi-team layoff, performance was not the source of it.

Personal: Creating a culture of secrecy and mistrust by mishandling communications. Until decisions are final, this is the rare case when full transparency with the team isn't helpful. That being said, I should be honest if asked and share the high level: the company is expecting funding headwinds and other difficulties in the near- to mid-term future and, therefore, looking at options to ensure we're best prepared for any scenarios — and commit to share updates as soon as there are developments.

5 Questions

1. What is our future product direction with this smaller team, and what skills will that require? This is the most important question. I need to work closely with the Product Manager to discover together where we're heading. The selection criteria must focus on who can best serve this vision. With fewer resources, we must revisit the fundamental "why?" behind our initiatives. This might actually trigger creative solutions we wouldn't consider otherwise.

2. Is this task clear, and do I have the necessary support? Follow up with the Director because this is a new and critical task. Do I understand precisely what is expected from me, by when, and in what detail and format? Outside our comfort zones, we often make too many assumptions, I should avoid that. I should also discuss where I can get help and mentorship through this process, as things will likely move quickly once decisions are finalized, and I’m new in this.

3. What is the exact reason for the layoff, and what are the selection criteria? I need to be clear and confident in understanding this decision because this is the sole reason people are being let go. Any hesitation or lack of information can hurt future trust with my team.

4. What inter-team dynamics should I take into account? While the ask is a list of individuals, team dynamics cannot be ruled out. Some people work great together, and exploding two pairs like this might impact the entire team more than letting go of one of the pairs. This being said, it’s a minor concern compared to the aspects above.

5. How will I support both departing and remaining team members? For those leaving, I need a dignified process. For those staying, I need to help navigate the change: process survivor's guilt, fear for their own future, and increased pressure. The team will need psychological safety to prevent further attrition and clear expectations about how we'll operate with reduced capacity.

Did I miss any important considerations? Do you disagree with some of my points? How would you handle this painful but sometimes necessary part of engineering management? Let me know in the comments!

This Week's Challenge

You're an Engineering Manager for a mid-sized tech company. During your 1:1, Kate, one of your strongest senior developers, shares that she wants to transition into an engineering management role. She's been with the company for five years, has deep product knowledge, and has informally helped newer team members.

Your initial reaction is surprise mixed with concern. Kate is one of your technical anchors - losing her hands-on contributions would create a significant gap in your delivery capabilities. You've relied on her expertise to solve some of your most complex problems.

While you can see her potential for leadership, your team already has sufficient management coverage, and there are no immediate EM openings elsewhere in the company that you know of.

Kate seems earnest in her request, mentioning she’s starting to feel plateaued technically and believes management could be her next career challenge. She’s asking for your guidance and support.

What do you do?

Think about what your goals would be and what risks you'd like to avoid in this situation. I'll share my thoughts next week. If you don't want to miss it, sign up here to receive those and similar weekly brain-teasers in the future.

Until then, here's a small piece of inspiration to match this week's challenge:

See you next week,

Péter