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Engineering Quality and Morale in the Face of Downsizing

Downsizing is rough; there’s not a whole lot of disagreement about that. And while many conversations about layoffs and downsizing center around the person being let go, for the VP of Technology or the CTO who stays on afterward, the most difficult period may just be beginning. Too often, the first round of cuts is not to be the last. However, with thoughtful preparation and considered response, companies can emerge from downsizing on better footing, stronger, and ready for renewed growth.

Laying the Groundwork

No matter the reason for downsizing, in all likelihood you and your team will be asked to perform just as well as you already do, but with fewer resources. Managing short-term risks is an immediate concern, but it’s imperative to structure the layoff in a way that is primarily focused on long-term success, in order to mitigate some of your post-downsizing troubles.

Some of the considerations in preparation for layoffs include:

• Key resource back-ups
• Maintaining legacy systems
• Determining non-essential development projects that can be temporarily shuttered
• Evaluating QA vs.development cuts
• Identifying ways to retain as many key personnel as possible

Many companies fill engineering resource gaps with locally-hired contractors. Of course this works well at times, but there are several common drawbacks that can make this a difficult path forward.

Engineering contractors tend to be very expensive. There may be little cost-savings over the employee who was lost during the layoff. If a contractor experiences an extended absence, or some other unexpected interruption, it will result in delays and effort to replace him/her, and may also carry additional expense due to contractual obligations etc. The employment status of contractors can also be tricky. Contractor mis-classification is an unfortunately common problem, and one which can have serious legal and tax implications for the employer, especially since the IRS is cracking down on intentional abusers of contractor status.

Outsourcing certain functions to a reliable offshore team removes these burdens. At Neova, we shoulder the responsibility of providing seamless engineering coverage; we handle HR functions for our engineers; we are accountable for our team members’ classifications. You’re relieved of all of these tasks when you outsource engineering functions to us, and yet you will still enjoy cost savings over a similarly-qualified, local contractor.

What and Who to Outsource

During a layoff, any engineering team leader will want to retain key engineering talent. Ironically, the talent you want to keep may be the talent you least feel you can afford to keep. Nonetheless, from a long-term perspective of product success, it’s hard to justify cutting the engineers who are most linked with the product’s integrity.

Some things tend to outsource better than others, including quality assurance and testing, feature prototyping, maintenance of legacy systems, and support for professional services. Evaluate different ways the post-layoff budget could be balanced. For example, while layoffs often result in cutting out all nice-to-haves and going bare bones with a product, layoffs in conjunction with strategic outsourcing may enable retention of ancillary features, even when an entire project group may be eliminated. Moving all, or all but one of, the QA team offshore may make it possible to retain more core engineers in-house.

Survivor Morale

For better or worse, the way layoffs are handled will impact company morale and reputation. You’ll likely be challenging a slimmer team to do even better than they already were., and they’ll have to accept this challenge in order for your to succeed. Their decision to accept it, or not, may lie more in your hands than you realize.

All remaining employees need to understand that there is a real plan for moving the company and the product forward, despite the layoffs. They will not feel secure without this belief, and their performance will suffer. Remaining workers need to feel safe taking a long-term view of their employment with the company. They need to believe that the layoff has been designed to save jobs in the future--their jobs, specifically--and that it isn’t a Hail Mary or the first step down the slippery slope.

The CTO or VP of Technology must help the reduced team redistribute the existing workload. They must demonstrate how some of the engineering pressure will be eased, e.g., by halting certain initiatives, outsourcing specific work, bringing in contractors etc.

A Clear Path Forward

Neova can help you during engineering transitions. Whether you’re in the planning phase of a layoff, or you’ve already run that gauntlet, we have multi-disciplenary teams ready to collaborate with you to Overcome lost expertise, provide assistance in reverse engineering, engineering strategic but non-core activities, meet feature development and release cycles, provide QA and testing services, and provide strategic but non-core engineering.

Talk to Us about How Neova Can Help You

You’re downsizing. You need to maintain company morale, customer satisfaction, and product integrity. It’s not easy, but we can help you get there, by filling the void created by loss of expertise, and by providing flexibility in resources that can be brought in on an as-needed basis.

Get in touch with us today and start a conversation that tackles downsizing with head-on, hands-on strategy.