Racking up a PR win is tough to do when your company is paring down its workforce by 15,000. But AT&T [T], which was still sensitive to the flogging it took for the way it nixed 40,000 from its payroll (under a different regime) two years ago, knew that it had to sell its most recent staff-reduction plan to leery employees and a cautious financial community if it didn't want another bloodbath.
To do that, the telecommunications giant organized a cohesive program of employee communications, updates and feedback that, besides closed-circuit television and a toll-free telephone info service, relied heavily on e-mail, the Web, and AT&T's own intranet system to get the word out and, in some cases, make converts of doubters.
And in the end, there wasn't any backlash to the Jan. 26 announcement that newly installed CEO C. Michael Armstrong had a plan to re-instill financial vigor in the #1 long-distance carrier in part by reducing management ranks through a program of employee buyouts.
Armstrong's Call: A Sign of the Times or Business Tomorrow?
AT&T's employee communications effort could have an impact beyond the long-distance giant itself. Indeed, the use of assorted new media tools in its communications arsenal might change the way other Fortune 500 companies convey information to personnel in the future - and greatly enhance how companies communicate with their employees in realtime.
"There was a time when employees who were being downsized out just found a pink slip on their desks," says Karen Berg, CEO of CommCore Communications Strategies, White Plains, N.Y. "That won't cut it anymore."
With people now conditioned to immediacy, Berg believes AT&T was wise to employ the Internet to get out news - and regular updates - pronto. "Companies can lose a lot of productivity to the rumor mill," she warns. "Better to keep folks in the loop, even when it may contain bad news." She thinks that factor, combined with generous exit packages and employee expectations that some downsizing was bound to occur under a new CEO, contributed to the early laurels AT&T has received.
Besides, Berg adds, there's another, less obvious, benefit to AT&T's effort. "I think it's great that they used the Internet in the ways they did," she explains. "People who aren't so comfortable in cyberspace may well have used it here, providing good exposure to an increasingly important communications tool. I think other companies can look to this for guidance."
The Plan Unveiled
Mapped out over a long weekend, AT&T's employee communications effort looked almost like a battle plan. On the Monday Armstrong was to address financial analysts in New York, AT&T began the day with a financial news release issued, per Securities & Exchange Commission guidelines for public companies, to all comers, followed shortly by e-mail transmissions to many of AT&T's 140,000 employees describing various "stakes in the ground," such as revenue and earnings growth targets. This was done to put the employee buyout offers and other AT&T actions into context, says Wes Dvorak, AT&T's manager/corporate electronic & strategic communications.
| THE PUSH OF THE PULL While the intranet became a treasure chest of information during the announcement, a team of business writers on the AT&T payroll was covering CEO Michael Armstrong's financial presentation. Reports were written up and cleared overnight, then emailed to workers Tuesday morning in a special AT&T Today. Second-day coverage also included analysts' responses and reaction on Wall Street. (Initially, AT&T stock dipped 5.8%, to $61.6875, but began climbing again on company forecasts of 2%-4% revenue growth. "Part of the game plan was using push technology - e-mail - and part was pull, urging employees to go to our intranet for more depth," explains Russell Thomas, managing Webmaster of AT&T's intranet-based manager InfoCenter. "Combined, we think it helped disseminate news in the first place, while also giving concerned employees the sense that further details were readily available to them." It will be months and maybe even years before the success of Armstrong's efforts can be gauged. And buyout plans won't go into effect for some time yet. But AT&T Manager/Corporate Electronic & Strategic Communications Wes Dvorak says early indications, as conveyed in employee feedback on the intranet, are that AT&T staff appreciated a communications effort that went the extra mile. Of 800 responses, he tells us, only about 20 were negative. |
At 2:30 that afternoon, right before Armstrong took the podium at the New York Hilton, the company e-mailed details of the buyout plan.
To underscore AT&T's point that employees were receiving the same message analysts were, Armstrong's presentation was carried via closed-circuit telecast to corporate locations around the country. Some employees also listened over the Web.
Press Doesn't Go a Pickin'
The groundswell of positive reaction - which included fairly glowing coverage in The New York Times and a mostly positive Business Week cover story - was due mostly to the fact that AT&T's buyout plans were more attractive than what was offered by former chairman Bob Allen (just as he cashed in lucrative stock options for himself). But savvy marketing also had a lot to do with it.
"In some quarters, the reaction was giddiness among employees who were getting close to retirement and had just seen their pensions enhanced," says Dvorak. "But things definitely went better because, with better and more timely information, employees this time didn't feel they were being told one thing and financial analysts another."
One reason is that company coverage of the cutbacks - which included hourly e-mail updates throughout the day, question-and-answers on the intranet, and online coverage of Armstrong's presentation to Wall Street analysts hours after employees got word - sought to explain how and why staff reductions and certain other actions could help AT&T achieve specific financial, expansion, and customer service goals.
But AT&T also strove to keep people in the know. (A common complaint in the earlier layoffs was that employees didn't know where they stood.) Moreover, the company this time made a concerted effort to see that employees heard details first from AT&T, not from the press.
"We knew everybody would have questions on this," says Russell Thomas, managing Webmaster of AT&T's intranet-based manager InfoCenter. "The e-mail and the intranet supplemented one another and, we think, gave employees a better sense of involvement and less of things just coming down from on high."
The previous heaviest traffic count on the company intranet, 1.5 million hits, occurred last October, when former Hughes Electronics head Armstrong agreed to succeed the fallen-out-of-favor Allen. But the site hit that mark by early afternoon of the day AT&T charted its new direction, with the final one-day tally coming in at 2.3 million hits. (Wes Dvorak, 908/221-7758; Russell Thomas, 908/221-7375; Karen Berg, 914/684-2330