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the CEO told me that the company is suffering of a cash-flow problem and the board of the company has asked him to layoff and close the department that i manage and outsource the tasks of our department (which is limited now to managing the portal of the company itself).
The CEO asked the board for sometime as my department was getting the highest income for the company before (but we have finished all of our projects, and the marketing/sales departments didn't get something new for us). Now, the board gave the CEO six months as notice period for my department (either we get projects, or close the department). what is the best way to share this with my team where:

  • without affecting their performance
  • without affecting the reputation of the company
  • giving my team a chance to take precautionary measures in case we didn't get more projects and the company decided to close our department

Note: the CEO shared this with me in friendly manner, and he wouldn't like to share this with anybody, and we are programmers [Technical], and getting more projects/clients is the responsibility of sales and marketing teams.

  • Why limited capiTalization? Programmers deal with logic. If I am a programmer and my group does not have any work for months and I cannot figure out time to look for another job shame on me. – paparazzo Feb 22 '15 at 1:02
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    @Blam, if you read the case correctly, you should notice that i wrote the our development is limited to the portal of the company. my policy is to keep the team busy all the time. many improvements have been done and a lot of sub projects have been implemented during recession like mobile applications and FULL CRM for the company. – WEB Feb 22 '15 at 7:53
  • Keeping the team "busy" and doing work that is productive for the company are two different things. It's like digging ditches and then just filling them back up. I suggest focusing on making your team as irreplaceable as possible. – user8365 Feb 22 '15 at 18:57
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That is a question that you have to ask the CEO. If you tell the team they are at risk, you will impact performance (good or bad), and some will start looking. It could spur the team to try and help find new work for the company, or depress them into not caring.

You have to know if the CEO/Board expected the team to know about the risk, and you need to know if your job is on the line if you tell them.

Telling them their jobs are at risk without giving them a way to help their cause will not help them to find a way to save their jobs. If winning new business is important let them know what numbers are needed. If voluntarily reducing headcount will save the rest let them know.

based on the added content in your question:

the CEO shared this with me in friendly manner, and he wouldn't like to share this with anybody, and we are programmers [Technical], and getting more projects/clients is the responsibility of sales and marketing teams.

You can't tell the team their positions are at risk unless you are willing to be fired by management. You therefore have to suggest to them that the company is looking for ideas to grow the business. You also can't squash any ideas even it is not your teams responsibility to find business. You are trying to save your jobs, you want out-of-the-box ideas.

  • Thanks mhoran, we are technical department, and getting more project is not our responsibility (mainly as our target and clients are oversea) – WEB Feb 21 '15 at 17:53
  • If they do nothing they are done. If they have ideas for future work it may be enough to save the department. Just because marketing and businesses development may at at fault, that may not save your department. – mhoran_psprep Feb 21 '15 at 17:55
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    @LinaRamiz The "its not my job" attitude is not going to help You and to a lesser extent need to work with the Sales and Marketing team to bring in new work even if its just a lead to pass onto the sales guys – Pepone Feb 21 '15 at 18:35
  • @mhoran_psprep, regarding "unless you are willing to be fired by management", indeed, i don't care for this, what i am caring for is business ethics. i don't want to expose some secrets of the company, and at the same time i dont want betray my team members and put them in a difficult situation if the board decided to terminate our department. – WEB Feb 21 '15 at 20:37
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Your first responsibility is to do what your management asks you to do. If your management has trusted you with confidential information, you need to respect that confidence. If you feel that you can't do so ethically, you need to resign. This particular situation is sadly common, and many people would feel no particular ethical problem with it. Some jurisdictions have requirements for notice before a layoff. Yours may not, and even if it does, your CEO may still have plenty of time to comply.

Nearly all you can do is go back to the CEO and say, 'I think this team could do some novel/interesting/valuable things, but I'd need them to know what's going on to solicit their involvement.' Either the CEO will go along, or the CEO will stick to the position that they are to remain uninformed at this point. Even this depends on the existence, in realistic fact, of some path for your team to deliver on something new and interesting. Trying to behave as a parallel sales force is not likely to help them or the company.

  • Agreed, this team and especially the manager should know their work is not critical to the company and can't be kept around much longer. – user8365 Feb 22 '15 at 18:58
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You should ask the CEO when when and how they plan to communicate the situation, and how you can help in doing that. Work on the assumption that staff will be told at some point.

If they prevaricate or indicate they wish you to keep the matter secret for an extended period of time (say, longer than 2 weeks), make it clear that you will not lie and that if the work dries up people will start to ask questions and you're going to need to have answers.

At some point the situation is going to become obvious to someone and unless everyone is told 'officially' in a short space of time, rumour will get round. Different people will know at different times and it will be hearsay. If the company is seen to be hiding this fact or telling people selectively, then it will be disastrous for morale - even if work picks up. People will start to look for other jobs because they won't believe theirs is safe (even if it is).

On a practical note, presumably at some point you're going to end up with no project work to give the team so you will need to raise this with your CEO as a time by which you expect the matter to be communicated. In the mean time, look for work which will make it easier for you to complete work well if it does come - paying off 'technical debt', improving your test coverage, automating things, research into things potential clients are interested in doing, etc.

You should also talk with the CEO about why there is no work for your department - do Sales understand the role you do? Are there reasons why the products you work on are harder to sell in general or different to the other things sales do? Are they focussed on selling something else, and if so, what and why? Is there anything you can do to make their job easier?

Note that if there is the potential for redundancies, many places have laws which mean you must tell staff and invite their ideas for avoiding or mitigating layoffs during the phase where you can do something about it (rather than after the point of no return). Even if it's not law where you are, it's the right thing to do and also a good idea if you want to keep your jobs. If you have a union, you may be required to discuss the matter with representatives shortly before making the announcement so you can co-ordinate communication about the consultation and any negotiations that may involve.

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At it's core it seems to be something of an ethical dilemma, with you in the middle. You have responsibility for two competing groups: upper management and your team. You will, of course, be best served by making upper management happy, but it's also in your best interests to act in a way that allows the business to thrive.

This means that you have a few decisions to make:

1) Am I willing to let my employees burn to save my own position in the company (this seems to be the most common route that people go)

2) In what ways can I help save the team while not harming my own position within the company?

Those are questions that can only be answered by you, and you alone, but as a bit of advice, I would suggest that, in a business role you're not responsible for the lives of other employees. If the money is there, do some people a favour, but if it's not there it's just not there. That's a reality of the business world and something everyone has to live with.

If it comes to giving layoffs, inform your team that it's going to happen far out enough in advance that they can at least do some preliminary preparation. If it'll help, discuss this with your boss so the layoffs happen in the most professional and respectful terms possible.

  • @Canadian_Coder, Thanks a lot for your answer. indeed, for me, i dont care about my position in the company (although i am the CTO). I have built and trained my team from scratch, and honestly the team is loyal to me (not to the company) and this is what made me confused – WEB Feb 22 '15 at 8:11
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I think you should be commended as a manager for wanting to be ethical and an advocate for your team and its members. Hopefully, they're all mature adults who understand that businesses don't give salaries away and there is a very wide range of notice periods for dismissal notice. It seems like they should have noticed they're doing busy maintenance work. To a certain extent, it is hurting their skill development if they're not willing to go find work that is more challenging. Everyone should know you are a manager hired by the company to do a job and that means sometimes you know things about the team that you can't share. I'm not saying they have to like it, but they should at least understand how this game is played.

Find out explicitly how secret this needs to be. Share your concerns about team performance with the supervisor. Try to work out a plan to inform the team. Maybe they will keep a member or two to work with the transition to an outside team. You better do your homework about outsourcing. Sometimes things cost less because they are of lesser quality. Many companies do not have the ability to work with outsourced teams. Some companies can't even function if their employees work from home let alone on the other side of the planet. You could be help responsibility of the transition doesn't work out.

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