Your income just dropped by half. The market tanked. The business failed. The divorce is expensive. Whatever happened, the reality is the same: you can’t afford your household staff anymore.
You have an estate manager making $130,000, a house manager at $95,000, a private chef at $85,000, and a housekeeper at $60,000. That’s $370,000 a year in household staff, and you need to cut it drastically or eliminate it entirely.
How do you handle this without destroying people’s lives or burning every bridge?
At Seaside Staffing Company, we’ve helped families through financial transitions in San Francisco and everywhere else. Market crashes, business failures, divorces, career changes. The families who handle it well do specific things. The ones who handle it poorly create unnecessary damage.
Here’s how to navigate losing the ability to afford household staff with as much grace and professionalism as possible.
When You Know You Can’t Afford It Anymore
The first mistake families make is waiting too long to acknowledge the problem.
You see the financial situation deteriorating but you hope it’ll turn around. You keep paying staff while your savings drain. You put it on credit cards. You delay the inevitable.
This makes it worse for everyone. When you finally can’t avoid it anymore, you have no money for severance, no runway to give people time to find new jobs, and you’re in crisis mode.
At Seaside Staffing Company, we tell families: as soon as you know your financial situation has changed permanently or for the long term, start planning. Don’t wait until you literally can’t make payroll.
A family in San Francisco’s Pacific Heights had a business fail. They knew six months out that they were going to have to make major changes. They didn’t tell their staff for four months, hoping something would change. When they finally let their estate manager and house manager go, they had no money for severance and gave two weeks notice. Both staff members were blindsided and struggled to find new positions quickly.
If they’d been honest earlier, they could have given more notice, offered some severance, and helped their staff transition while they still had resources.
The right time to address this is when you know there’s a problem, not when you’re completely out of money.
Assessing What You Can Actually Afford Going Forward
Before you talk to anyone, get clear on your actual financial situation.
Can you afford any household staff at all? If yes, how much? If you currently have four people, can you keep one? Can you keep someone part-time instead of full-time?
Run the numbers honestly. Don’t base it on what you hope will happen. Base it on your current reality.
Household staff aren’t an optional expense you can turn on and off casually. These are people’s livelihoods. If you eliminate positions now but think you might be able to afford them again in six months, you’re creating chaos. Be conservative in your assessment.
We worked with a family in San Francisco who let their entire household staff go when they hit financial trouble, then tried to re-hire them three months later when things improved. The staff had all found other positions and weren’t interested in returning. The family lost good people they could have kept if they’d been more strategic.
Figure out your baseline. What can you afford long-term, not just this month?
Deciding Who Stays vs. Who Goes
If you can’t keep everyone but can keep some people, you have to decide who stays.
This is brutal. There’s no good answer.
Some families keep the staff member who’s been there longest out of loyalty. Some keep whoever is most essential to basic household functioning. Some keep the least expensive person so they can afford to keep someone.
All of these are defensible approaches, but none of them feel good.
At Seaside Staffing Company, we generally recommend keeping the person whose role is most essential to your household functioning at a baseline level. If you have young kids, that might be childcare. If you have a complex property, that might be your house manager. If you’re elderly or health-limited, that might be whoever helps with daily tasks.
Don’t keep someone just because you like them better if their role isn’t actually necessary. That’s not fair to them or to you.
A family in San Francisco had to choose between keeping their housekeeper or their house manager. They kept the housekeeper because they’d known her longer, even though the house manager was actually more critical to their needs. Six months later they were drowning in household operational chaos they couldn’t manage themselves. They should have kept the house manager.
The Conversation with Staff About Financial Changes
This conversation is awful. There’s no way around that. But you owe it to people to be honest and direct.
Don’t sugarcoat it. Don’t blame it on vague “changes.” Don’t pretend this might be temporary if it’s not.
Sit down with each person individually. Tell them your financial situation has changed and you can no longer afford to employ them. Give them as much notice as you possibly can. Explain what you’re able to offer in terms of severance, if anything.
Be prepared for emotions. People might be angry, scared, hurt. They have a right to those feelings. Don’t get defensive.
At Seaside Staffing Company, we coach families through these conversations. The worst ones are when families try to avoid being direct. “We’re making some changes” or “We’re restructuring” instead of “I can’t afford to pay you anymore.”
Staff need clarity. They need to know this is real, it’s not about their performance, and they need to start looking for other work immediately.
A family in Nob Hill had to let go of their private chef and house manager. They sat down with each person separately, explained that a business loss meant they couldn’t sustain their current household staff budget, gave them six weeks notice, and offered two months severance. Both staff members appreciated the honesty and the runway to find new positions.
Severance: What’s Fair When You’re Already Broke
Severance is tricky when you’re in financial crisis. You want to do right by people, but you literally might not have the money.
If you have any resources at all, offer something. One week of severance for every year of employment is a common standard. If you can’t afford that, offer what you can.
If you truly have nothing, be honest about that. Don’t promise severance you can’t pay. But also recognize that people who’ve worked for you loyally deserve something if you can possibly provide it.
Some families sell things to fund severance. Some borrow from family. Some negotiate payment plans with staff where they pay severance over several months instead of all at once.
At Seaside Staffing Company, we’ve seen families get creative. One family couldn’t afford cash severance but let their estate manager keep the household laptop and gave her use of their vacation home for a month while she job searched. Another family paid for outplacement services to help their staff find new positions.
If you’re completely broke, the best you can do is give as much notice as possible, write strong recommendation letters, and make introductions to anyone who might be hiring.
A family in San Francisco lost everything in a business bankruptcy. They had zero money for severance. But they gave their house manager three months notice, spent time helping her update her resume, made calls to other families they knew who were hiring, and wrote her a glowing recommendation. She found a new position within six weeks partly because they invested time even though they couldn’t invest money.
Giving Staff Time to Find New Positions
The more notice you can give, the better.
Minimum is two weeks. That’s professional standard. But if you know months in advance that this is coming, give months of notice.
Some families worry that if they give a lot of notice, staff will leave immediately or do a bad job during the remaining time. That’s rarely what happens with professional household staff. Most people appreciate the notice and will work professionally until the end.
If you’re worried about it, you can structure it as “I’m letting you know now that in three months I won’t be able to continue employing you, but I’m paying you through that period so you have time to find something else.”
At Seaside Staffing Company, we’ve seen long notice periods work well for everyone. Staff have time to search without desperation. Families get continued support during the transition. Everyone has time to plan.
A family in San Francisco gave their nanny and housekeeper four months notice when they knew they were going to have to eliminate those positions. Both women found new jobs within that timeframe and left on excellent terms. One even offered to help train her replacement with the new family.
The Guilt and How to Manage It
You’re going to feel guilty. That’s normal.
These people depend on you for their income. You’re taking that away. Even though it’s not personal and you don’t have a choice, it feels awful.
Some families let guilt make them act weird. They avoid their staff during the notice period. They get overly apologetic. They make promises they can’t keep about future employment.
Don’t do that. Feel the guilt privately, but stay professional with staff.
You can acknowledge that you feel bad about the situation. “I really wish circumstances were different” is fine. But don’t make it about your feelings when they’re the ones losing income.
And definitely don’t say things like “this is harder for me than it is for you.” It’s not. They’re losing their job. You’re losing employees. Those aren’t equivalent.
At Seaside Staffing Company, we remind families that while this is hard emotionally, staff are experiencing actual financial impact. Keep perspective on whose situation is more difficult.
What You Owe People vs. What You Can Actually Provide
There’s what you morally owe people who’ve worked for you, and there’s what you can actually provide given your financial reality.
Ideally you’d give generous severance, tons of notice, great references, introductions to other employers, and maybe even help with health insurance continuation.
In reality, you might be able to give two weeks notice and a reference letter. That’s not what they deserve, but it’s what you have.
Don’t beat yourself up over what you can’t do. Do everything you can within your actual constraints, and be honest about those constraints.
The worst thing you can do is promise things you can’t deliver. “I’ll definitely give you a good severance” when you know you have no money. “I’ll help you find something else” when you have no network to tap. Don’t make promises you can’t keep.
At Seaside Staffing Company, we tell families to under-promise and over-deliver if possible, not the reverse.
When to Be Honest About Your Financial Situation
How much detail should you share about why you can’t afford staff anymore?
There’s no perfect answer. It depends on your relationship with staff and your comfort level.
You don’t owe them a detailed accounting of your finances. But you do owe them enough information to understand this is real and serious, not just you being cheap or changing priorities.
“Our financial situation has changed significantly” is usually enough. If you want to share more, you can. “The business failed” or “We’re going through a divorce and finances are tight” gives context without being too detailed.
Some families share nothing and staff feel confused and suspicious. Other families overshare to the point where it’s uncomfortable.
At Seaside Staffing Company, we recommend sharing enough that staff understand this is legitimate financial constraint, not a choice or a reflection on their performance.
A family in San Francisco told their staff, “We’ve had significant financial losses this year that have changed what we can afford. This is not about your performance or our satisfaction with your work. It’s purely a budget issue.” That gave staff the information they needed without getting into details the family wasn’t comfortable sharing.
Maintaining Relationships After You Can’t Employ Them Anymore
Just because you can’t pay someone anymore doesn’t mean the relationship has to end badly.
If staff leave on good terms, stay in touch. Send holiday cards. Connect on LinkedIn. If your financial situation improves dramatically, let them know you’d love to work with them again if they’re available.
Some families feel so awkward about the whole thing that they cut off all contact. That’s a mistake. You can maintain friendly relationships with former staff even when the employment had to end for financial reasons.
At Seaside Staffing Company, we’ve seen families re-hire staff years later when finances improved. But only because they maintained the relationship in the interim.
A family in San Francisco had to let their estate manager go during the 2008 financial crisis. They stayed in touch, sent her occasional updates, got coffee once a year. Ten years later when their financial situation had completely turned around, they called her. She was in a different job but happy to come back. They worked together for another five years.
The Families Who Pretend Everything’s Fine Until It’s Not
The absolute worst way to handle this is pretending you can afford staff until you literally can’t pay them.
Some families keep household staff employed while not paying them on time, bouncing checks, or making excuses about delayed payments. This is cruel and possibly illegal.
If you can’t afford to pay people, you can’t afford to employ them. End the employment professionally rather than stringing people along.
We’ve seen families destroy relationships with excellent staff by doing this. The staff feel lied to and disrespected. They lose trust not just in that employer but in household employment generally.
At Seaside Staffing Company, we’ve had candidates come to us traumatized from situations where families stopped paying them but didn’t formally end employment. They kept showing up to work for weeks without getting paid because the family kept promising “next week.”
Don’t do this. If you can’t make payroll, that’s the moment you have to end employment. Immediately. Not in two weeks when you hope money comes through.
A family in Pacific Heights kept their house manager employed for three months while paying her sporadically and making excuses. She finally quit, angry and broke. They’d destroyed a relationship with someone who’d worked for them loyally for five years. If they’d been honest when the problem started, she could have found new work and left on good terms.
How to Restart Household Staffing When Finances Improve
If your financial situation improves later and you want to hire household staff again, here’s what to know.
You probably can’t get the same people back. They’ve moved on. That’s fine. Don’t take it personally.
But you can reach out to former staff and ask if they know anyone who might be a good fit. Many professional household staff know others in the industry. A good reference from someone who worked for you before is valuable.
If you let people go professionally and fairly, they’ll be willing to help you. If you handled it poorly, they won’t.
At Seaside Staffing Company, we work with families who are rebuilding household staff after financial setbacks all the time. The ones who handled the initial downsizing well have an easier time hiring again.
Don’t expect staff who you let go to be immediately available when you’re ready to hire again. They have new jobs, new commitments. But approach them respectfully, acknowledge what happened before, and see if they’re interested or can refer someone.
A family in San Francisco who’d let their household team go during a financial crisis got back on their feet three years later. They reached out to their former estate manager saying “We know you’ve moved on, but if you’re ever interested or know someone who might be, we’d love to work with you again.” She wasn’t available but she referred them to a colleague. They hired that person and she’s still with them.
Losing the ability to afford household staff is hard on everyone. It’s embarrassing, stressful, and involves disappointing people who’ve worked for you.
But you can handle it professionally. Give as much notice as possible, offer what severance you can, be honest about your constraints, help people transition to new positions, and maintain relationships even when the employment has to end.
The families who do this well minimize the damage and sometimes even preserve relationships that can be valuable later. The families who handle it poorly burn bridges, hurt people unnecessarily, and create problems that last way beyond the immediate financial crisis.
If you’re facing this situation, take a breath, assess your options honestly, and do the best you can within your actual resources. That’s all anyone can ask.
