How a 4 day workweek saved this company from layoffs

When the aftermath of the pandemic threatened the stability of his company, Aman Mann, the co-founder and CEO of spending management solution Procurify, didn't know what he was going to do to keep costs low enough to stay afloat. But one thing he wouldn't do: massive layoffs. 

"We built Procurify for the worst of times, not the best of times," he says. "Our philosophy has always been 'How do you help save jobs, protect your team and your company?'"

At the time, Procurify was facing a potential 20-30% layoff margin in order to break even. Instead, Mann opted to cut the staff's salaries — including his own — by 20% in an effort to manage spending. But he didn't stop there: If employees were being paid less, Mann only thought it fair that employees' workload and expectations should be reflective of their new compensation, so he implemented a four-day workweek.  

Read more: 92% of employers expect more layoffs in 2024

Not only did this strategy help avoid burnout during the stress of the transition, it was so successful they've kept it today, even after the economy settled and their normal salaries were reinstated.  Mann says productivity increased so dramatically, there was no going back. 

"When we were in that position again and the market was bad, we knew we could successfully refuse to cut corners and cut people," Aman says. "We leveraged our software and took the time to look at every dollar being spent to figure out how to optimize our budgets to avoid layoffs again." 

Unfortunately, most tech companies don't go that route when faced with the same kind of financial hardship — according to data compiled by Layoffs.fyi, an online tracker keeping tabs on job losses in the technology sector, 1,119 tech companies have laid off about 248,974 staff since the start of 2023. 

To help other companies rethink their approach to layoffs, EBN recently chatted with Mann, who shared his team's approach and their strategies. 

How did all the uncertainty of the last several years actually lead to some positive outcomes for your business? The biggest thing was psychological safety — knowing that their company is committed to protecting them allowed my team to focus on driving the business and an effort to impact the people around them and their community in the right way. We talked to our team and we told them we were not going to be doing layoffs and we are going to fight together. Whatever outcome happens, the outcome happens to the team as a whole. I did not want it to be about this business surviving for the sake of capitalism; I want it to be a place that survived because we live truly to our values and because my team understood the genuineness of who we are. 

Aside from a shorter workweek, you took a pay cut yourself. What message did you hope to send? 
The world is changing. But a lot of leaders just see the profit line item and how things will impact their own salaries and their bonuses. They don't think deeply about the compassion of what it means to be a human today. And the world is going to change on that behalf — and I want it to change, but it's going to take a lot of work. Most industries are still run by dinosaurs, so it's up to other businesses like us to stand for something bigger than ourselves.

Read more: The pros and cons of a 4-day workweek

Why should layoffs be a last resort?
Organizations are going to benefit from people wanting to stick with the company and helping at their toughest times, because that's when you find out what your organization is truly made of and what your culture is really made of. If you want people there and if you want people to help you succeed and find different creative solutions to get out of those tough times, then you have to invest in that team and take a stand to protect them. Because if you can get that team to truly believe that you care, they will care right back tenfold on delivering and supporting the organization.