Reference no: EM133045505

Task Rabbit's Downsizing Dilemma

Samantha Shah, the founder, and CEO of TaskRabbit, the online marketplace that lets people hire freelancers for odd jobs, says the recent rash of layoffs due to the coronavirus crisis is giving her ugly flashbacks. "I feel like I have PTSD," she says. "I know exactly how these founders and managers feel."

Samantha founded TaskRabbit just a few months before the global financial crisis that began in 2008, and she oversaw several rounds of layoffs before her company was acquired by IKEA.

The year 2014 sticks with her. The economy was improving, but TaskRabbit faced an uncertain future. Customers were shifting toward mobile technology and competition for the platform was intensifying.

Samantha realized she couldn't hold on to the company that she had worked so hard to build unless she made big changes. After many agonizing conversations with the company's five-member executive team, Samantha came to the conclusion that she needed to eliminate 25% of the workforce - 100 people.

"I knew it was best for the company in the long run, but at the time I was living my worst nightmare," she recalls. "I was letting people down."

But Samantha understood that these layoffs were not about her. "However difficult it was for the team and I to make the decision, I knew it was going to be more difficult for the people I had to let go."

Samantha has read recent statistics that have shown that in times of downsizing, women and racialized groups suffer the most. She wants to avoid this from happening at TaskRabbit.

Adapted from Harvard Business Review, April 2020

Samantha wants to focus on 4 main priorities:

1. Her first order of business was to craft a message to all employees.
   1. Prepare a 500-word memo from Samantha to all employees. Be sure to address these key questions in the memo: Why is it happening, when will it happen, how will downsized employees be supported, next steps. Tone is very important.
2. She has asked her HR team to develop a downsizing strategy that would allow TaskRabbit to bounce back after the pandemic. 
   1. Identify the criteria you will use in deciding how to downsize 25% of the workforce. 
   2. How can she ensure that her workforce remains diverse and inclusive after downsizing?
3. She is also concerned about the "survivors". She does not want to lose her HIPO's. How can TaskRabbit support the remaining employees and retain the HIPO's?
4. What are some lessons HR professionals can learn from the downsizing exercise at TaskRabbit? What should HR's role be before, during and after downsizing?