“How you manage people leaving says as much about your leadership as how you bring them on board.”

Matt Glynn - Director, GLS Group

Staff exits are inevitable. Some will be voluntary - an employee resigns to chase a better offer, change careers, or start their own venture. Others will be involuntary - you make the call because of poor performance, misconduct, redundancy, or a strategic shift.

For startups, every exit matters more than in big corporates. A single departure can strip away critical skills, derail timelines, and even unsettle investor confidence. Worse, if mishandled, exits can trigger legal claims, reputational damage, and culture fallout.

PAA: What is a staff exit in HR?

A staff exit is the process of ending an employee’s working relationship with the company - whether initiated by the employee (voluntary) or the employer (involuntary).

PAA: Why do startups need to plan for staff exits?

Because every departure in a small, high-intensity team affects capability, morale, and legal risk far more than in larger organisations.

This is an important stage of the start-up journey because:

◼️Small team impact – Losing even one key person can cause major disruption

◼️Legal exposure – Involuntary exits can trigger wrongful dismissal or discrimination claims

◼️Culture shock – Exits can destabilise morale and performance

◼️IP & confidentiality risk – Departing staff may walk out with valuable know-how

◼️Investor perception – High turnover can spook potential investors

PAA: What’s the difference between voluntary and involuntary exits?

Voluntary exits are initiated by the employee; involuntary exits are initiated by the employer.

Legal Implications

◼️Wrongful dismissal claims

◼️Breach of contract disputes_ Confidentiality breaches

Founder Relationship Issues

◼️Distrust if exits are handled poorly or perceived as unfair

◼️Loss of loyalty from remaining staff

Commercial Implications

◼️Delayed product timelines

◼️Customer relationship disruption

Operational Implications

◼️Sudden knowledge and skill gaps

◼️Increased workload for remaining team

Biz Valuation Issues

◼️Investor concerns over retention and team stability

PAA: Can you terminate someone immediately?

Yes, in some cases (e.g., gross misconduct), but due process is still critical to avoid legal fallout.

Have a clear exit policy

◼️Cover both voluntary and involuntary scenarios

◼️Include notice periods, final pay, and return of company property

Manage voluntary exits well

◼️Conduct exit interviews to capture honest feedback

◼️Protect relationships - they might become future collaborators or advocates

Handle involuntary exits with precision

◼️Follow all legal procedures in your jurisdiction

◼️Document everything leading up to the decision

Protect business assets

◼️Ensure return of devices, documents, and keys

◼️Revoke access to systems and data immediately upon departure

Manage the team narrative

◼️Communicate departures appropriately to avoid speculation

◼️Reinforce stability and forward momentum

Plan knowledge transfer

◼️Assign responsibilities before the person leaves

Leverage legal and HR expertise

◼️Especially for involuntary exits in employee-favourable jurisdictions

Twitter (Post-Musk Acquisition)
Mass involuntary exits in 2022 - via email and overnight access cuts - sparked lawsuits, regulatory investigations, and global headlines. While swift, the lack of procedural compliance in some jurisdictions created significant legal and reputational cost.

Airbnb – COVID-19 Layoffs Done Right
In 2020, Airbnb laid off 25% of its workforce but won praise for a transparent process, generous severance, extended health coverage, and job placement support. Proof that even painful exits can build goodwill if handled with humanity.

IBM – Age Discrimination Claims
Multiple lawsuits alleged IBM used layoffs to push out older workers. The drawn-out litigation and PR fallout highlight how exit decisions, if poorly framed or documented, can lead to long-term damage.

◼️ Voluntary Resignation – Employee chooses to leave the company

◼️Involuntary Termination – Employer ends employment (with or without cause)

◼️Constructive Dismissal – Employee resigns due to employer conduct

◼️Redundancy – Role is no longer required, not based on performance

PAA: What’s the difference between redundancy and termination?

Redundancy is role-based, termination is person-based (performance or conduct).

Watch out for the legal jargon and refer to the knowledge hub for more detailed explanations and resources.

Staff exits are inevitable, but how you manage them can either strengthen or damage your business. For startups, every exit carries outsized risk - so approach each one strategically, with a clear plan, airtight compliance, and an eye on protecting both your people and your business.