The day I fired 60% of my company

And how I felt about that

Image from getcerebral.com

I must confess that I was unsure if I used “The day I fired” or “The day I had to fire” for the title. Thinking more carefully, I choose the option you see now because that was a decision of mine. It might not be the best decision I took as a CEO, but it was the best one I could make at that moment.

In this text, I will share why I fired 60% of my company, how I felt about that, and what I would do differently today.

But before, I need to tell you a little bit about my company so you can understand everything.

I founded Cupcake Entertainment in 2012, a gaming company with the purpose to help people exercise their brains while having fun. We did that by developing free-to-play games for mobile devices and Facebook. We made money with in-app purchases. For example, people could pay to keep playing if they were close to beat a level and didn’t have any more moves.

We became a profitable company in 2015, and we have been growing our revenue since there. In 2017 we raised US$1 million, which helped us to grow even faster. I was on TechCrunch! That was awesome! We expanded our team, and we were paying salaries above the market average. Everything was amazing!

In the first semester of 2018, we kept the same average monthly revenue from the previous year. We were facing different challenges to keep growing.

In July, one of my partners left (I can tell this story in another text). He was the CMO (chief marketing officer), and it took us two months to find someone to replace him. Our revenue started to drop during this time since we did not invest anything in user acquisition and marketing. We believed that after hiring someone, we would fix that problem, but that didn’t happen. We didn’t hire the right person. Our revenue kept dropping. And worse, now we were spending money on user acquisition that it wasn’t coming back.

I didn’t know at the time, but I was facing burn out while all of this was happening. My performance was not the same. Instead of taking a vacation to recover my energies, I choose to keep working on trying to solve the problems. That didn’t work.

I remember that a cousin of mine asked me if I wanted to go to Argentina with him. I declined and said that I had to work. Bad mistake.

Another thing that happened during this was a change in technology that affected our games. We had a 10% decrease in our revenue from one day to another. That freaked me out. I stopped to analyze our numbers better, and I found out that we were in a terrible situation. As my performance was awful, I didn’t pay attention to some stuff, which led the company to this position.

I call my two partners at the moment for a meeting, and we discussed the problem. This day was a Thursday. I remember that I was not feeling ok with all that, and we decided to look for options to solve the problem without telling the team.

We had another meeting on Friday, and things were still nasty.

Then a meeting on Saturday and we decided that we have to decide until Monday about what to do. I went out tonight for drinks this day because I wanted to forget everything that was happening. I came home early because we had scheduled another meeting for Sunday morning.

We had a quick chat in the morning and decided to have another meeting in the afternoon.

That was when I saw that our only solution was to fire most of our company’s people. At least I thought that was the best solution. We didn’t have money to keep all of our employees. At the time, we were 13 people. I made some calculations and chose who would stay at the company based on role and salary.

I was ready to share this with my partners in the afternoon. I still didn’t have lunch and decided to take a bath before eating.

And then I had a panic attack during the shower.

It was one of the worst moments of my life. I started to cry, to shake like crazy. I was out of control. I don’t know how much time passed while this was happening, but it looked like an eternity.

At some point, I was able to leave the shower, took my cellphone, and sent a message to my partner that lived in the same city as me telling him what was going on with me. Without hesitation, he came to my house.

While I was waiting, I calmed down. It was awful.

I tell him what I have just decided to do, and he understood the situation. I still haven’t eaten then I decided to call for a delivery. I was feeling weak.

While eating, I shared the news with my other partner (this one lived in another state here in Brazil).

And this was pretty much Sunday.

On Monday, I had the task of sharing the news with everyone at the company. We had a daily meeting at 10 AM with everybody, and I would use that moment for that. I usually was one of the first to enter the meeting, but this time I preferred to be the last one to join.

As I tried to share the news, I started to shake. The words were not coming out easily. And then I began to cry. The team was trying to calm me down. They didn’t know yet what I was about to say. I kept trying to share the news, but I was not able to do it.

One of my partners sent a private text message to me, asking if I wanted him to share the news. I said yes.

The team was devastated after hearing the news. We explained everything about why we were doing what we were doing. All of our financials were public, so the team was already seeing our decrease in revenue. They understood.

For the past couple of weeks, my employees asked me many times if the revenue drop was something to be worried about, but I always replied that everything was under control. I was not lying. I did think things were under control. My performance was below my usual, and I could not see what was going on.

I fired 8 from 13 people. I felt terrible about doing that.

That happened on October 1st and became known as the Dark October.

I helped the employees that I fired to get other jobs. I still talk to most of them, and every time I visit one of their cities, we do something together.

Today, instead of firing eight people, I would propose a decrease in the salary of everybody. I already have read stories about companies that did that to survive and how it worked.

I remember that 2 of the employees that were still in the company suggested do that. I was not able to give my best, and I declined their suggestion. One of my partners also told me that that would be a bad idea. I didn’t want to discuss pointing the opposite.

I started therapy one week after all of this. It was October 8th, the day I turned 30 years old.

The situation of the company was not stable yet. We had to do something different if we wanted to keep existing.

In February 2019, after some months of therapy, I decided to take a week off from work. We were still facing many challenges to recover the company, but I believed this time that taking this time would be good for the company and me.

I came back full of energy and fresh ideas. That increased my performance, and after a few weeks, the company was doing ok again.

Often, we think that we should work more to solve the company’s problems, but usually, that is wrong. It is essential to take some time off to be able to think clearly again.

If I was performing better, I would probably go with the idea of decreasing everybody’s salaries instead of firing eight people. I would talk to my partners and share why I thought that was a better idea. My employees were proud of working with me, and I believe they would find a way to help the company to grow again and keep everyone part of it.

I can’t change the past, but I can help others now through my story.

If I ever have to face something similar again, I expect to be better prepared to make better decisions.

Leaders are people like everyone else. Trying to push yourself too hard is not always the best idea.

Join my email list here.

I help entrepreneurs build healthy organizations. Learn more: http://joaovsouza.com/

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store