How to fire employees using AI and destroy your company's reputation

A cautionary tale about how misguided management, combined with reckless use of new AI technologies, can ruin a company. However, we hope that this does not happen, and all the participants of the story will get a happy ending.

Disclaimer: The sources are Telegram channels of private bloggers. This means that it is impossible to check 100% the accuracy of the information, and there is a certain amount of subjectivity in the opinions of the authors. Therefore, we will not indicate the name of the company directly in this text. Whoever wants, the original is available below (see the link at the end of the text).

However, the authors of the publication provide a link to the company's reviews on Glassdoor (where several fresh negative reviews have already appeared), so you can draw your own conclusions.

But then, why does it still make sense to publish this story? Because, for what it's worth, such stories are not fiction. They are important to talk about. And we believe that it is essential to warn those who run their companies against acting this way.

What happened

At some startup, management decided to fire employees using Big Data. The authors of the original post cite a screenshot of a letter from the company CEO to employees of the development office. According to unverified reports, 150 people have already been fired this way.

The company is developing a platform for game developers to automatically connect and accept payments in different markets. The company works in hundreds of countries and makes $60+ million in annual revenues.

What was this HR audit relied on?

Judging from the text, AI analyzed employee activity in Jira, Confluence, Google Docs, Gmail, their dashboards, and marked them as unengaged and unproductive employees. Based on this, management sent out termination letters to these staff members.

There are 6 reasons why you shouldn't do that

These are things we've mentioned more than once in our publications and trend research:

1. Human touch is the Head of the Management

AI, automation, Data Driven HR, predictive management - all these tools are important and useful, but on top of that should be standing Human Touch (we wrote about it in the Ukrainian IT Business Media AIN). If some people and processes are marked as inefficient, management / HR has to get involved in the process and check it out personally, have a conversation, give a chance to correct the situation.

Or you can hire robots and fire them, too, with the help of robots.

Respected staffing expert Greg Savage briefly and accurately mentioned this trend in his video message. You can't completely hand over the hiring process to artificial intelligence. The AI should only be an assistant. It's imperative that you have the personal involvement of a hiring expert. At the very least, it will make the right decision and improve the candidate experience.

The Mercer research contains an excellent slogan / formula describing the importance of this balance:

Informed by data, augmented by humans

In other words, HR processes should be based on data analysis and driven to a successful outcome by a professional recruiter/ HR / Talent Acquisition manager.

Are performance algorithms and estimating predictive quitting algorithms acceptable?

In general, predictive algorithms are an interesting domain. Including the prediction of future layoffs and methods of analysis and management of employee turnover in HR, it has been researched for a relatively long time.

If you are interested to learn more about this subject, here are some examples of the decent reviews:

This algorithm can predict when workers are about to quit—here’s how (CNBC)
Here’s How IBM Predicts 95% of Its Turnover Using Data (LinkedIn Blog)
Better Ways to Predict Who’s Going to Quit (Harvard Business Review)
‍How do you use AI to spot behaviors of an employee who wants to leave? (Rytfit)

2. Effective management is wise

It is the kind of management that will not go to extremes and try unproven experiments on its employees.

It is important to remember that the main value of a company is not its intellectual property, assets, or products, but its employees.

What will the company gain from the deterioration of the Employer Brand? More precisely, what will it take from it? Loss of reputation is the worst thing that can happen to a company.

3. Know your situation

Imagine a situation where the system analyzes the performance of employees who set up the system so well that activity has dropped. And...would they be fired? And if the useless employees flooded said communication channels with meaningless spam activity, would they be rewarded?

It's reminiscent of a situation where some country state has reduced their crime rate, and because of that, their police workload has decreased. Does that also mean that they are doing a bad job and should be fired?

What is important for a supervisor to recognize:

You should know what's going on
You should know what's causing it
You should know what will this mean to your business, and how your business will be affected

4. Don't lie to people

It's possible that the grounds for firing were very different (up to a worsening situation where the company can't afford a large staff) or the reasons for firing these particular people were different too. But it's crucial not to lie to your employees and always be honest.

5. Don't let SkyNet kill the humanity

This point will be brief: who told the manager that these AI scripts or services work correctly and don't contain logical errors in the code or in the basic algorithms themselves?

6. Good news is for share, bad news is for person

Even if the further analysis confirms that results and the employees really need to be fired, a good manager will not limit himself to a confusing and offensive message in a messenger or by email. Such things need to be discussed personally, perhaps through an HR manager. This decision is too important to be communicated carelessly.

Company management's point of view

The head of the company made a statement about these posts that the company is a living organism, which needs to be constantly in motion in order to survive and become better than the competitors. In the current market, they are not going to slow down the development of projects, because of this, they have to undertake unpopular measures. The company (by his words) demands a lot, but also gives a lot in return.

The management appreciates the employees, thanks them for their work, considers them great specialists, and it is painful to part with them. He promises that fired employees will get the maximum level of support from the company: from compensation packages to the assistance of the recruitment agencies to find them their next job.

But that pill cannot sweeten the devastating effect such actions have.

To summarize, in this case, it is not so much the names and personalities that matter, or whether the story happened the way it is being presented or not, the fact remains that it is very practically possible.

On the one hand, the transition of companies in the VUCA World to Remote Format or even the creation of Remote-First companies has exposed new problems. Remote employees can be inefficient, and then the company has to find efficient ones.

On the other hand, the way it is done in this example is rough, unethical and unreasonable.

What about layoffs in the world?

Sometimes you hear the counterargument that, for example, in the U.S. an employee can often be fired very quickly, without time off or notice periods (The best - and worst - places to lose your job, by BBC).

But just because it's done, that doesn't mean it's the right thing to do.

Has the manager or HR worked with employees' motivation and engagement? Are they confident that the selection results are correct? Do they understand the impact of such actions on Employer Branding in the long run? Have they weighed the pros and cons of such actions?

These are just some questions that company management should be asking themselves in such important matters as hiring and firing employees.

P.S. Make it in Ukraine hopes this case will be helpful to you. And if you're looking for experienced, motivated employees who build their remote work as efficiently as possible, contact us.