Why compassion matters
Biotech startups face steep odds of success. Studies show roughly 90% of early-stage ventures don’t reach commercialization. Amid that reality, workforce reductions and restructurings can feel inevitable. Yet the way in which companies handle these speaks volumes about its culture, leadership, and reputation.
Approaching restructurings with care isn’t just “the right thing to do”. It preserves trust, safeguards morale among retained employees, and positions you as an employer of choice if and when things rebound.
Lead with authenticity and empathy
- Clear, honest communication: Tell impacted employees what’s happening, why it’s necessary, and how decisions were made.
- Dignity and respect: Deliver news face-to-face (video if remote), listen to reactions, and keep communication simple and authentic
- Be a bridge for your employees: Offer outplacement services, create a resume book, and make direct introductions to industry contacts.
- Keep your HR team (or hire a consultant) onboard: this ensures a smooth transition for employees and that there is an individual or team in place for them to have questions answered.
Develop a practical plan you can stand behind
- Align leadership on inclusion criteria and timing before any announcements.
- Equip leaders with communications, FAQs, and change management training so they can effectively engage in difficult conversations and deliver consistent messaging.
- Communicate company-wide: acknowledge the change, reinforce the mission, and share next-steps with remaining team members.
- Provide dual-track support: provide immediate resources for those leaving the organization and make sure to check-in with everyone else.
- Leverage check-ins and pulse surveys to better understand employee sentiment and quickly respond to feedback with additional communications or support as needed.
Timing Is Everything: Same-Day versus Notice-Period
There is no academic research on the matter (yet), but our experience over the last several years shows a clear trend toward same-day restructurings. While this does offer speed, protection of the company’s systems and IP, and potentially clean execution if done properly, it will often feel abrupt, risk reputational damage, and erode trust with retained employees.
It is worth considering a notice-period restructuring, if the situation allows. When done well it keeps the exiting employees engaged through the end, and anyone acting unprofessionally can be handled individually. Extending this trust shows a level of respect and value for the contributions of all employees, with everyone remaining dedicated through the end.
Pitfalls vs. Best Practices
| Pitfalls | Best Practices |
| Ambiguous messaging | Transparency around business drivers and decision logic |
| One-size-fits-all severance plans | Tiered packages calibrated to role, tenure, and terms & conditions of an employee’s agreement |
| Neglecting retained employee support | Weekly check-ins, stay interviews, employee pulse checks, open feedback loops, team offsites |
| Silent leadership | Leadership forums where execs open themselves to questions and feedback |
Anchoring Trust After a Restructuring
In the period after the announcement there are concrete steps you can take to strengthen the remaining team:
- Lead with transparency, which can take the form of hosting open “Office Hours” with leadership and following up with FAQs so people can revisit answers.
- Encourage empathetic management, encouraging managers to use 1:1s as opportunities for check-ins and career development chats.
- Recognize the contributions of the departed employees through brief, personalized notes thanking them for their contributions.
- Ensure continuity by pairing up remaining and exiting employees for mini-workshops to hand off work in process.
- Refocus the mission by reminding everyone how today’s work unlocks tomorrow’s breakthroughs, and consider sharing patient-impact stories or visuals at all hands meetings.
Moving Forward
Restructuring organizations takes a great deal of empathy. In our experience, it’s not just about minimizing legal risk or PR fallout. It’s about honoring human contributions, strengthening your company’s reputation in a tight-knit biotech ecosystem, and laying the groundwork for sustainable growth once you’re back on your feet.
What challenges have you faced when guiding teams through tough transitions? We’d love to hear your perspective and insights as we work to build more compassionate and effective playbooks together.