Masters in Business · Friday, September 4, 2026
During the 2008 financial crisis, Vanguard maintained a no-layoff policy for its employees, a move Bill McNabb believes was crucial for reassuring clients and maintaining service levels. He explained that while competitors were cutting staff due to falling revenues, Vanguard doubled down on service and problem-solving, which ultimately strengthened client relationships.
“So, you know, all of our competitors were laying people off left and right because transaction volumes had just gone away.”
“Our people were incredibly nervous. I mean, people were wondering, so we went to our people and we got our board's blessing to do this and said, there will be no redundancies, no layoffs. All we want you to do is be flexible and we may need you to move from one role to another, wherever the client demand is and whatever the need is. So we ended up, um, doubling down on service and doubling down on fixing problems that, you know, we had service, you know, everybody has service issues. We took, if we had excess people, we turned them loose on those problems.”
“And the theory was you couldn't cut your way out of this. And if you had people nervous about their own jobs, how are they going to reassure clients about the world's not ending? And they were going to feel conflicted. And I think it really worked because.”