The New Rules of Layoffs
Executives weigh the best way to let people go
3 min
When McDonald’s Corp. said it would temporarily close its U.S. offices as it conducts layoffs at the burger chain, it brought renewed attention to a debate swirling inside HR departments: What is the best way to let people go?
The question is taking on urgency as more U.S. companies, from Goldman Sachs Group Inc. to Amazon.com Inc., move to shed staff in a wave of layoffs that is heavily concentrated on white-collar jobs.
When it comes to carrying out those cuts, companies employ a range of approaches designed to minimise the pain and disruption of a difficult process.
Here are six of the questions employers face.
All at once or a little at a time?
Many companies grapple with whether to make one sweeping layoff or do a series of smaller cuts. Both carry risks.
At a time when employers still face challenges filling positions, large job cuts can lead companies to inadvertently cut key units or people, executives say.
Yet, taking it slowly to give a company time to assess its financial situation can take a human toll, creating a prolonged period of anxiety and instability inside an organisation. Amazon.com has enacted more job cuts than expected in recent weeks, announcing last month that it would cut 9,000 more corporate jobs following earlier layoffs.
Face time or FaceTime?
Bosses long believed delivering the bad news face-to-face was the more humane approach. Covid-19 changed the equation. While many workers are being called back to the office, at least part time, full office attendance remains rare. Some executives are now asking themselves whether it is actually easier—and more humane—for employees to learn about a layoff on Zoom versus in-person.
“It almost seems cruel to ask someone to commute into the office just to let them go,” said Andy Challenger, senior vice president at outplacement firm Challenger, Gray & Christmas Inc.
Midweek or Friday?
Just as with in-person firings, the conventional wisdom was Friday was the best day to carry out a layoff. That gave employees the weekend to process the news and plan their next steps.
That thinking has shifted. Many employers now see a midweek announcement as more humane, according to Lorna Hagen, a longtime chief people officer. A layoff on a Wednesday, Ms. Hagen said, can give employees time to talk to HR representatives or benefits providers during business hours in the ensuing days.
It’s not you—it’s me
One mistake managers continue to make, HR professionals say, is to tell employees how hard it is to let them go. “That just hits people the wrong way,” said Mr. Challenger. “It’s not about you.” The latest wave of layoffs often has felt like a competition among CEOs over who could craft the best apology.
Many executives have turned to lengthy memos to explain why they resorted to layoffs. Some of those notes look “suspiciously similar” across different companies, said Paul A. Argenti, professor of corporate communication at the Tuck School of Business at Dartmouth. He recommends that managers be as transparent as possible with employees about the health of a business so that no one is surprised when layoffs are announced.
Multiple months of pay, or less?
The size of exit packages is also up for debate. At the very least, companies should give laid-off employees a month of severance pay, corporate advisers say, though a number of employers have offered more. When Salesforce Inc. said in January that it would lay off employees, Marc Benioff, the company’s co-founder and chief executive, told workers that those in the U.S. would receive a minimum of nearly five months of pay, health insurance and other benefits.
Some smaller companies have received pushback from employees for not accelerating stock-vesting dates or for issuing severance packages that some saw as underwhelming. HR advisers recommend that companies be as generous as possible with exit packages. In an era when employees can easily sound off on a company even when they are being fired, it is also a best practice to develop a severance policy that can be defended.
OK, now who goes?
One of the last, toughest parts of any downsizing: determining who should be let go. The process of developing a layoff list is complicated and can stretch for weeks, with department heads and managers often debating which employees to eliminate. Seniority once guided layoffs, though it is now far more common for companies to assess skills over tenure, and to heavily consider someone’s recent performance.
HR officials will then often scrub a list, wanting to ensure that a company isn’t disproportionately laying off workers over the age of 40, or unfairly targeting minorities and others. Even with much preparation, many veteran HR leaders say layoffs can be messy. “There is no good way to do this,” said Gregory DeLapp, who spent much of his career in HR at the steel and materials manufacturer Carpenter Technology Corp.
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From making unpopular decisions to learning when to listen, leaders from five businesses reveal what nobody prepared them for — and how running a company has challenged their expectations.
Technology and semiconductor shares fell sharply as investors questioned the debt financing the AI infrastructure boom and confronted higher rates and Chinese competition.
Elon Musk is exploring a potential merger between Tesla and SpaceX, a deal that could reshape the future of AI, robotics, autonomous vehicles and space technology. With a combined valuation potentially reaching $3.5 trillion, the move could bring Musk’s vision of an interconnected technology ecosystem closer to reality, although a deal remains uncertain.
5 min
Elon Musk has engineered ties between Tesla TSLA 3.41%increase; up pointing triangle and SpaceX SPCX 7.79%increase; up pointing triangle that are hard to break, and now he wants to fuse them together permanently.
Musk has run both Tesla and SpaceX concurrently over the past two decades, using a schedule that dictated which days he spent focused on each business.
The companies have often shared resources and personnel, signaling their close ties. Last year, SpaceX looked into creating a spacesuit for Tesla’s humanoid robot Optimus, a person familiar with the matter said. Tesla last week showed off its new Roadster, a vehicle featuring SpaceX rocket thrusters that it hopes to soon bring to market.
And in recent months, Musk has repositioned both companies by expanding beyond their core operations toward a shared mission centered on artificial intelligence.
The world’s richest man on Tuesday signaled his interest in tying up SpaceX and Tesla, marking what would be the biggest corporate merger of all time. Because he serves as chief executive of SpaceX and Tesla, Musk said committees of independent directors at both companies are evaluating a possible deal, adding that a transaction might not come to fruition.
The committees will likely evaluate, with lawyers and bankers, how each company would fare in a potential deal and how a deal might best be structured. They then present their conclusions to their respective boards, who typically vote on whether to proceed.
“It’s an odd Kabuki dance where two groups of people are talking and I can’t be in the conversation,” Musk told SpaceX investors on Tuesday in response to an analyst’s question about a potential deal.
For Musk, the merger supports his vision of a world full of autonomous cars, humanoid robots and weekly rocket launches, as well as the data centers and satellites required to keep the whole thing running.
Some investors and analysts said they expect a transaction would be structured as an all-stock deal, with SpaceX potentially paying a modest premium for Tesla shares.
SpaceX, which has a market value of about $2 trillion, said it is seeing sharp growth in revenue across its businesses, which include operating data centers, launching rockets and operating satellite networks such as the internet service Starlink. Tesla is valued at about $1.5 trillion and is expanding its operations beyond its automotive and energy business. Shares in both companies traded higher following the news Tuesday.
Musk’s substantial ownership stakes in both companies, along with voting control at SpaceX, has enabled him to set the deal in motion. Analysts and investors said the deal will probably face regulatory scrutiny internationally, though some see Musk’s close relationship with the Trump administration as an asset to getting approval.
Blurred lines
The companies haven’t said which directors are on the special committees evaluating a potential deal. Several SpaceX and Tesla board members have either personal or business ties to Musk. And like Musk, venture capitalist Ira Ehrenpreis sits on both boards.
In a filing this week, Tesla outlined millions of dollars in business agreements with SpaceX and its subsidiaries last year, including $143 million in car sales to SpaceX, $3.3 million in advertising that it bought on the social-media platform X and $430 million in revenue from the sale of Megapack batteries for SpaceX’s data centers.
The companies also split the cost of resources including the use of Musk’s SpaceX jet and the bill for his personal security, which he runs through a private company.
Employees at both companies routinely move between companies to work on special projects, and some executives have dual roles, including Charles Kuehmann, vice president of materials engineering at both SpaceX and Tesla, and Ashok Elluswamy, the vice president of AI software at Tesla who runs a joint venture with SpaceX called Digital Optimus.
Over the years, Musk has launched new startups within his empire, including brain-implant company Neuralink, underground-tunnel developer the Boring Company and xAI, the AI startup that merged with SpaceX in February.
It is that AI business that Musk thinks can serve a market worth tens of trillions of dollars, justifying the need for a merger.
The business case goes like this: Tesla is developing robotaxis and robots, which it calls “physical AI.” SpaceX is working on the back end of physical AI: the data-center capacity and internet connection required for those robotaxis and robots to operate continuously.
“I don’t see what the value of Tesla is if it’s not merged with SpaceX,” said investment adviser Ross Gerber, a former Tesla bull turned critic invested in both companies. “If they don’t merge, the brains of everything that runs Tesla is owned by another company.”
On top of it all, both companies face constraints on the supply chains they need to make this world a reality, particularly when it comes to chips. To address this, Musk earlier this year announced a joint venture between Tesla, SpaceX and Intel to design and manufacture chips in Texas. “The most epic chip-building exercise by far,” he has said.
Musk at the wheel
For Musk, a merger would also solve two problems: demands on his attention and his lack of control at Tesla.
Tesla for years was Musk’s only public company, a status that came with greater scrutiny. There, Musk reports to a public board, as well as individual investors who make up around 30% of Tesla’s voting power, according to FactSet.
The question of Musk’s attention became a particular focus for investors and the board in recent years after he acquired Twitter in 2022 and launched xAI in 2023, and again in 2025 as he spent time in Washington, D.C., running the Department of Government Efficiency in the early months of President Trump’s second term.
As Tesla’s car business suffered in 2025, Musk threatened to take his AI ambitions outside the company if he wasn’t granted 25% voting control. Last November, Tesla shareholders approved a new pay package for Musk, which created a path for him to vastly expand his stake.
As of Sept. 30, Musk owned a roughly 20% stake in Tesla, according to the company’s proxy filing.
The SpaceX IPO gave Musk a different path. When SpaceX went public in June, the deal’s structure enabled him to have more than 80% voting power at the company—so much that he can’t be fired and decisions can’t be made without his support.
If SpaceX acquires Tesla, he will likely stay in control.
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