Executive Mentor — Hard Call
Framework for decisions with no good options.
$skillfish add ~skills/executive-mentor-hard-call Real Conversations
See how the Executive Mentor — Hard Call skill responds to actual requests. These are representative examples of what your AI agent will produce.
I have two options: lay off 20% of the team (8 people) to extend runway to 24 months and hit default alive, or keep the team and miss the board's 18-month runway requirement. The 8 people I'd cut are all real contributors — no obvious low performers. We're at $2.6M ARR, 40 people, $240K/month burn. What framework do I use for this decision?
This is a decision with no good options, only better-informed ones. Here's a framework that actually helps.
Step 1: Pressure-test whether these are really the only two options. Common overlooked options:
- Salary reductions in exchange for equity (10–20% cuts across leadership can save $30–50K/month without headcount loss)
- Revenue-based financing or venture debt ($1–3M at your ARR, adds runway without dilution)
- Cutting non-headcount burn (SaaS subscriptions, office, contractors) — typically 10–15% of total burn for a 40-person company
- Pricing increase on renewal cohort — a 10% price increase on existing customers is $260K ARR, or $22K/month toward burn reduction
Have you genuinely explored all of these? If yes, proceed to the layoff decision.
Step 2: Clarify what the 8 positions are, not just headcount. "No obvious low performers" is different from "all roles are equally critical to the next 12 months." Map each of the 8 against your key value drivers: are these roles that contribute directly to revenue growth or retention, or are they roles that were right for a larger company vision that needs to be deferred? This isn't about performance — it's about strategic necessity given the revised trajectory.
Step 3: Accept that delay makes it worse. Every month you don't make the call, your runway shrinks, your team senses distress without understanding it, and your ability to do this with care and severance diminishes. Delaying a layoff is not being kind to the 32 you're keeping — it's transferring the risk to them.
On the people: Good execution of a painful layoff means: generous severance (2–3 months for strong contributors), strong references, active help with job placement (warm intros to your network), and honest communication to remaining team within 24 hours. The quality of your execution is the only thing you control here.
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$skillfish add ~skills/executive-mentor-hard-call