If chipper M&A news constituted the refrain in every business success set to music in 1999, layoffs are the recurring theme in the more somber Greek tragedies now playing
out in early 2001. And we're not just talking about bloodbaths at Internet companies (although the online financial advice outlet Motley Fool, which canned a third of its
workforce earlier this month, exemplifies continued suffering among that lot).
In recent weeks, media conglomerates have begun shedding staff pounds in ratios almost directly proportionate to declines in ad revenues. Legacy corporations issuing less-
than-rosy earnings reports also are among those adhering to New Year's resolutions to slim down.
Among the most recent job cuts: 10,000 at Lucent; 7,000 at Sara Lee; 26,000 at DaimlerChrysler; 10,000 at Nortel Networks; and a comparatively measly 1,700 at Dell
(nevertheless significant, given these are the first layoffs ever in the computer maker's history). We're guessing the communications teams at these and other pink-slip-ridden
companies have been pretty busy of late.
As one departing employee who asked not to be identified put it: "I don't know if there are any good ways [to communicate about a layoff] but there are definitely bad ways to
handle it."
Evidence, we suppose, that a communicator's best bet in a layoff situation (aside from avoiding the ax personally) may simply be to avoid making fallout conditions worse than
they already are.
PR NEWS touched base with a few consultants and veterans in the we've-seen-it-all category and asked for their insights into what makes a solid layoff communications
plan. While the list that follows is by no means comprehensive, it includes some of the cornerstones of a good crisis model:
Amass a cross-functional core team
Who will be assembled in the event of a layoff? Your special team should include representatives from employee communications, labor relations, IR, HR, media relations, IT and
very likely will be quarterbacked by the COO, according to Peter Fleischer, director of Ketchum's global workplace communication practice. Then establish a mantra to be used in
the event that layoffs occur.
"The facts will change in the event of an actual crisis, but the [philosophical] approach should be the same," Fleischer says. "It may be as simple as stating, 'We will
approach this problem in a manner that's consistent with the behavior of a world-class corporation.'"
Support displaced workers
A well-orchestrated layoff (if there is such a thing) will include support beyond severance pay for exiting employees. Gruner + Jahr for example, brought in an outplacement
service to provide career counseling, resume tips and mock interviews to employees who'd been cut from one of its clients.
"That softened the blow and definitely helped my morale," says one former staff member who asked not to be identified. "I felt like I was jumping right in and doing something
to get a new job, which eased the separation anxiety."
Remember the survivors
How you treat departing employees will have considerable bearing on the morale of those who remain. Layoffs are never positive, but can you at least rest assured that your
policies were humane and fair - and that you helped people to maintain their dignity. Also, be prepared to address remaining employees' concerns about increased workloads in the
aftermath.
"If you say your employees are your most valued asset and then you treat them like garbage, your communications objectives go down the toilet," says Ernest Del Bueno, VP at the
issues and crisis management firm Rowan & Blewitt.
Choose your spokespeople wisely
Credibility is the main objective in announcing layoffs. "If you appoint a person from HR or PR whom nobody trusts to announce the news, your message won't get through," Del
Bueno says. Pick someone else, if necessary. "Maybe a union representative or a VP from some other area of the company."
Leverage all available technology channels
Namely, your Intranet and other Web platforms. "Imagine you put a stinky fish on the table and nobody talks about it, but everyone is aware that's it's there," Fleischer
says. "If you go to a company's Web site [Intranet or external site] and there's no mention of the most significant thing that's happening at the company, it feels completely
disingenuous."
Consider instituting chats or message boards on your Intranet - they'll not only give concerned employees a voice, but will also enable you to squelch rumors quickly. Also,
prepare "dark site" templates that are ready to be deployed (on both internal and external channels) in the event of layoffs.
Don't hide behind technology
It's no replacement for face-to-face communication. An article in USA Today last week chronicled the newest trend in layoff non-communication: death by e-mail.
Electronic pink slips have been adopted by companies such as Amazon.com and Discovery.com, but the practice is flawed, according to Fleischer. "You can use e-mail as part of your
communications strategy, but it shouldn't become your strategy. If you're treating people with respect, face time will be important."
Acknowledge families
Consider sending letters home to families of laid-off workers to explain the rationale behind the job cuts. "The worst thing you can do is say you treat your employees like
family and then not communicate in a way that's consistent with that claim," says Fleischer.
Brief security
Before layoffs are announced, you may need to brief the security force at your facilities about how to deal with reporters who may try to gain access to your campus to
interview departing workers, advises Larry Smith, president of the Institute for Crisis Management. Also, have contingency plans for rare cases involving violent worker
departures.
Clarify phone policies and procedures
Once layoffs are announced, apprise switchboard operators and employees about where to forward media calls. Also, provide training to mid-level managers who are likely to
receive phone calls from concerned family members - or from reporters who are playing "dirty pool" (i.e. not readily identifying themselves as reporters), Smith says.
Inform community leaders
If layoffs are likely to have a significant impact on the local community, schedule briefings with the chamber of commerce, mayor's office, economic development commission, the
congressional member representing your district and possibly even the governor's office. Discuss the health of your company and the rationale behind the layoffs. "This way, when
reporters start calling to get a reaction from community leaders, their spokespeople will already have been informed, and won't give the usual surprised reaction like they've been
hit in the stomach," Smith says.
Brief managers
Talk to them about how to discuss the layoffs with employees in their own facilities, and how to handle the inevitable calls from the media asking, "Is this going to happen to
you?"
Contact local charities and schools
If you're closing or relocating an entire plant, remember you may be disrupting community organizations that rely on your company for financial resources. Smith cites an
example of one company that planned to move its operations to Mexico: "The company announced a contribution for the next two years to the school corporation equal to the [tax base
it] would lose because of the plant's closing. The company also made a two-year pledge to the United Way equal to the amount employees and the company had contributed in the
previous two years. This gesture resulted in an editorial in the local paper about what a good corporate citizen this company was - even though they were moving jobs to
Mexico."
Tell it like it is
"In a layoff situation, you reach a critical moment of truth when all of your stakeholders will decide whether your positioning statements are just a bunch of B.S." Fleischer
says. Is your company prepared to walk the walk? If not, your communications team may find itself taking a hike.
(Ernest Del Bueno, 703/234-4400; Peter Fleischer, 312/228-6834; Larry Smith, 812/284-8351.)
When Reporters Come Back To Bite You
PR people often don't hear about impending layoffs any sooner than the rest of the staff. Unfortunately, this often leads to chaos in the media relations arena. Imagine, if
you will, a tipped-off reporter who calls to inquire about potential layoffs and is told that the company has no such plans.
"A week later, the company announces layoffs of several thousand people and the PR person looks like a liar," observes Larry Smith, president of the Institute for Crisis
Management in Louisville, Ky.
Given this common scenario, Smith usually counsels media relations professionals to use a standard positioning statement in response to such calls, such as, "There are no
guaranteed jobs in this world anymore. We have no plans to announce layoffs today." He admits, however, that a good reporter often will read between the lines and recognize that
this is not a denial.
Return On Investment?
In the past, investors have welcomed news about corporate layoffs as an indication that streamlined efficiencies may lead to greater returns. "You could be like Chain Saw Al
and investors would think you did a good job," says Peter Fleischer, director of Ketchum's global workplace communications practice. But this sentiment may be changing. An
article this month in The Wall Street Journal, for example, cites multiple study findings indicating that a majority of companies implementing layoffs in the early '90s
failed to realize the profits they expected would result from such measures. The reason? Downsizings often mean fewer employees saddled with more work - and a bad attitude to
boot.