Designing and carrying out a reorganization

Layoffs are a last resort—a business decision made to set up an organization for future success. But before getting to that point, there’s often an opportunity to reorganize teams, realign priorities, and better leverage existing talent. The goal isn’t just survival; it’s making sure the company is structured in a way that gets the best out of people and the business.

We’re in a world where AI is reshaping industries daily. New AI-driven companies are launching every single day. If your company isn’t evolving, that’s a red flag—and you should be asking leadership why. Just like layoffs, reorgs are difficult but necessary. They create short-term turbulence, but when done right, they set the stage for long-term success.

That said, transformation always creates friction. The biggest challenges usually come from a lack of clarity—people don’t fully understand what’s happening, why it’s happening, or how it impacts them. But here’s the thing: change is inevitable. What makes the difference is how it’s managed. When teams know what’s coming, why it matters, and their role in it, they’re much more likely to navigate the shift productively.

This essay is for the leaders actually driving organizational transformation—the ones making the tough calls, structuring the changes, and guiding teams through uncertainty. But if you're part of these conversations or impacted by them, this should help you make sense of the process too.

There's no such thing as the perfect org

Though it’s called a re-org for a reason, every re-org is really about trying to create a more effective org. The perfect organization doesn’t exist. But over time, and as a team scales, it usually develops a structure that works well enough for the current moment.

The key to understanding re-orgs is realizing that they’re not about creating a perfect structure—they’re about optimizing for what the company needs right now. That perspective is freeing. It stops you from chasing some mythical, long-lasting structure and instead focuses you on designing an org that best supports the current priorities.

Before deciding on a re-org, ask these questions:

1. What is the org currently optimized for? Are these still the right objectives?

2. What’s the biggest challenge—process, people, or product?

3. How much of that is a structural problem vs. a cultural or talent issue?

4. Is this re-org actually about fixing structure, or is it an attempt to fix individual people?

Setting Principles First

Before the tough questions come up, set guiding principles for how decisions will be made. This ensures that choices are made based on clear priorities, not personal preferences. It also keeps leadership and teams aligned, reducing unnecessary friction.

While the specifics of guiding principles will vary by company and situation, here are a few that have helped me:

1. Customer → Company → Team → Self (in that order).

2. People should land where they can thrive and contribute.

3. Optimize for flexibility and future growth, not just today’s problems.

4. Minimize disruption to individual reporting structures where possible.

Principles don’t make decisions easier—they make them clearer. They force accountability, not just for teams but for leadership too. A leader shouldn’t optimize for what’s easiest for them personally and should actively encourage their teams to call them out when they do. This is how you avoid blind spots.

Start with Roles, Not Names

When structuring a new org, start with circles and squares, not people’s names. Map out roles and responsibilities first, based on what the team needs—not based on who’s currently on the team.

It’s tempting to say, “David should run this” or “Val is great for that.” And sure, they might end up in those roles anyway. But starting with names locks you into existing biases rather than forcing you to rethink what the business truly needs.

At the same time, this isn’t a fantasy exercise. It has to be grounded in the real constraints of the team, business, and budget. The goal isn’t just to tweak the current org—it’s to build the structure the company actually needs to scale.

Don’t Optimize for Happiness—Optimize for the Right Environment

If you do this well, people will still be uncomfortable. That’s expected. But the goal isn’t to make everyone happy in the short term—it’s to create an environment where they can succeed in the long term.

You can’t control someone’s happiness. What you can control is whether the structure, expectations, and support systems allow them to be successful. Happiness follows from that—not the other way around.

This is just like product design. You don’t build based on exactly what customers say they want—you figure out what they actually need and build around that. The same applies here.

Communicate. Then Communicate More.

Every team member should deeply understand the reasoning behind the re-org:

• Why it’s happening

• What we’re optimizing for

• What success looks like

Write this down. Turn it into a clear story that people can engage with, question, and push back on. Encourage feedback—but set clear guardrails:

• Disagree with the decision, not the values.

• Challenge based on principles, not personal preference.

• This isn’t a democracy. Feedback is welcome, but not every suggestion will be implemented.

Avoid Promising Stability

Many leaders make the mistake of promising stability post-re-org. That’s a lie. You can’t promise stability—you can promise principles.

The company will keep evolving. The best thing you can do is build an org that can adapt, rather than one that’s trying to find some mythical “final form.”

Keep Listening Post-Re-org

A single announcement or an all-hands meeting isn’t enough. People will process change in waves. Keep communication channels open—AMA sessions, anonymous feedback forms, direct conversations with managers and team members.

Even when a re-org is done for the right reasons, teams will experience it differently. The best leaders stay tuned in and adjust as needed.

Re-Orgs Take Time

Re-orgs are expensive—not just in effort, but in trust. The biggest frustration most teams have isn’t the re-org itself—it’s not understanding why it happened. Give the new structure time to take effect, but don’t settle if it’s not working. Keep checking against the original values and objectives. If you do it right, a re-org isn’t an end—it’s a starting point for what’s next.