(Important Disclaimer: I have been recently laid off. I am not at liberty to discuss any of the specific terms of that layoff, and none of what follows should be taken as commentary on my previous employment. This article covers general advice for anyone who has been put in the uncomfortable position of being laid off. Also note that I am not a lawyer, and employment law varies wildly from state to state. )
Layoffs happen in the game industry. Remember, business decisions in the world of games are made by people who generally think it’s a good idea to make games and sell them to make money.
Layoffs will happen in one of a few different situations. They’re fairly common after one company acquires another. In this case, there are often overhead redundancies. Sometimes, a company will be acquired for IP or titles in development that the purchased company owns, and not necessarily for the team that developed those titles.
Layoffs can and do happen when projects end. Frequently, a company will wait to see how Game #1 does before greenlighting Game #2. And in between the launch of Game #1 and knowing how well it does, it’s a cost-saving measure to reduce headcount.
Lastly, layoffs can be a more gentle way of firing people to open up budget for other hires or expenses. Eliminate the position of an underperformer or two, and open up some headcount a couple weeks later in an area you need more help. A bit passive-aggressive, but again, we are talking about the game industry.
But enough about why it happened – it happened to you. What do you do?
1. Don’t Panic.
Getting laid off, especially when you don’t deserve it, especially when you didn’t see it coming, is traumatic. It’s easy enough to freak out a bit. After all, you’ve put in crazy hours for these people, you’ve given them your best ideas, you’ve sacrificed a lot, and now this is how they repay you? Take a deep breath. Don’t panic.
You’ve got options. You are now an Experienced Game Industry Professional. Getting a second job is nowhere near the ordeal that getting that first one was. You’ve made connections, you’ve networked, you’re not alone, and you’re going to land on your feet soon enough. Your first job is not to get emotional, and to stay focused on creating the best possible outcome for yourself.
2. Don’t Sign Anything Right Away
In your traumatized state, a helpful and well-meaning HR representative will explain that you will be getting some sort of benefit (or not, depending on how dire the situation is), and that they’ll need you to sign some forms.
Traumatized-you does not make good decisions. Traumatized-you does not think too clearly. That’s why Rational-you, today, is going to commit this to memory. When presented with the paperwork, explain that before you sign it, you’re going to need to have your lawyer/spouse/tax advisor/whoever look it over with you. Don’t feel bad if you don’t have a lawyer to look over the paperwork with. Say that you do anyway.
Box up your stuff, take everything home, have a beverage of choice, and then give the documents a good read. Really understand what’s being offered, and really understand what you’ll be giving up.
Typical clauses attached to severance include, non-compete agreements, non-disclosure agreements, non-recruit agreements, non-disparagement agreements, and the waiver of the right to sue the company.
Non-compete agreements are rare, and they’re basically unenforceable. Nobody can make you sign away the right to work in your industry, but that’s essentially what a non-compete agreement says – that even after you’ve been let go, you won’t go work for a competitor for some period of time. Never, ever agree to a non-compete agreement. Explain to your friendly HR representative that you do not plan on quitting the industry, and would like to have an agreement with that section excised. They will probably go along with it.
Non-disclosure agreements are pretty standard and nothing to get too worried about. Basically, you’ll be asked to keep company secrets secret, and honestly, you should be doing that anyway, agreement or no. You will also often be asked to keep the terms of your layoff a secret. Also a pretty innocuous request.
Non-recruit agreements are tricky. They’re generally pretty broadly written, so imagine the following scenario. You get laid off. A few months later, you get a new job. A buddy of yours who wasn’t part of the layoffs eventually gets fed up and quits. He applies for a job where you applied for, and he puts you down for the referral bonus. You are now in violation of your non-recruit agreement and can be sued. You probably won’t be. I don’t think I’ve ever heard of any game company going after an employee in a situation like that, but if you start a new company and strip-mine your former company bare, expect a call from the lawyers. Just be aware of the potential impact of what you’re agreeing to, and take care to step softly with your former co-workers for the duration of the agreement.
Non-disparagement agreements basically ask you to agree not to badmouth your former employers. You should not be doing that anyway. The industry is tiny, and the words you say will make their way to the wrong ears. Trust me on this, it’s happened to me. You will be working with a lot of the same people for the rest of your career, and an insult takes a long time to forget.
As for waiving the right to sue the company, if you weren’t planning on doing this anyway, you probably don’t need to worry about it.
3. This (Like Everything Else) Is Now A Negotiation
You are being asked to give up certain rights, and you are being offered some benefits in return. You are most certainly not being offered severance out of the goodness of the company’s heart. They are offering an inducement to get you to agree to certain conditions. This should sound familiar to you – this is a situation where you should absolutely be negotiating.
Once you’ve taken the time to thoroughly read what you’re being offered and asked to give up, prepare your case. Are you being offered severance? Ask for more. Explain why you deserve it. Talk about why your contributions were exceptional. Talk about some ways you made money for the company. It is absolutely key to stay positive and professional. This won’t work all the time, (or even perhaps the majority of the time) but it’s essentially risk-free, and some companies won’t sweat a one-time cost.
Don’t like one or more of the agreements you’re being asked to sign? Explain why. Ask to get those specific clauses excised.
But if you hit a wall, and you’re feeling a little ballsy, explain the negative results that might be incurred if you don’t agree to the termination agreement. Are you being asked to sign a non-recruit agreement? Explain that you’ve got close ties with a lot of the remaining team, and could easily enough induce them to join you in whatever you do next. Don’t make any threats; but be willing to remind whoever you’re negotiating with that you aren’t powerless in this discussion.
At the end of the day, individual circumstances will have a lot to say about whether and how you negotiate. Push too hard, and the company may simply walk away and you’ll be left with no severance at all. Determine how much of a risk that you’re willing to take, and be prepared to fold if you really need that check.
4. File For Unemployment
If you have been laid off, you are eligible for unemployment. Unemployment benefits vary from state to state, but generally amount to about a third of your salary. This can be a huge help in the intervening weeks or months of looking for a new job. You’ve been indirectly paying for unemployment insurance during just about every job you’ve ever had. This is why. A lot of people have an instinctive pride-based reaction to the idea of applying for government benefits, but pride isn’t going to pay the rent.
If you wanted a safe, stable industry for employment, you’d have gone to work for a
bank insurance company …well, not a game company. Brush up that resume, reach out to your contacts, get out to some IGDA or other industry functions, and you’ll be fine. Or move back in with your parents. But you’ll probably be fine.