Arun Sudhaman 05 Jun 2020 // 12:00PM GMT
And so, with one broad stroke, Edelman reminds us that the ongoing pandemic, amid relentless political turbulence, will test hearts and minds in a manner that few of us can predict.
Let’s start with the second part of that equation first. Richard Edelman’s announcement that the world’s biggest PR firm is laying off 390 employees is a financial calculation, pragmatically designed to keep the business operating at something close to break even.
In the cold, hard language of business arithmetic, it is an understandable response to the economic havoc that Covid-19 has wrought, particularly across sectors in which Edelman is traditionally strong — travel, hospitality, automotive, aviation, and energy.
"This is a truly global recession,” says Edelman in his memo to staff. "No office, market or region escaped its impact.” There is a mention of the “body blows” the business has suffered, which no doubt include the loss of the $20m+ Samsung business earlier this year.
But Edelman’s words, set alongside the messaging from other agency leaders that have been forced to make similar restructuring moves, are a timely reminder that few firms will be spared from the ravages of the Covid-19 lockdown.
Ours is often an effervescent industry, perhaps a little too susceptible to glad tidings and glad rags. And while some firms have no doubt benefited from increased demand in specific sectors and practice areas, the news of Edelman’s layoffs is likely to disabuse anyone of any illusions they harbour regarding the impact of Covid-19 on the global PR industry.
Edelman, lest we forget, is independent, family-owned and carries zero debt. It is not subject to the demands of pension funds that still require a 20% margin, whatever the consequences that might have on the staff tasked with delivering those returns. Its owner instead pledged there would be no Covid-19 layoffs at his agency.
It is a firm that can mitigate its financial exposure via geographic breadth and sectoral depth across numerous practice areas that are in demand now, such as B2B technology, employee engagement and crisis counsel. And still it has been forced to lay off 7% of its total global workforce. If Edelman is not safe, then which firm is?
The positives are worth bearing in mind. I cannot a recall a time when corporate communications has been more important, when staff and customers have needed more in the way of accurate information and empathetic reassurance. Our research bears this out. The value of credible media has become clearer.
We are more caring, more mindful. The boundaries between work and home have blurred in a manner that is largely helpful. These things matter because of the first part of the equation I alluded to above. The financial calculations are well understood, but it is the human cost of this crisis that will test us most.
Even as we profess to come together, we run the risk of finding ourselves further apart, unmoored amid layoffs, furloughs and an existential level of dread. Thousands of your former colleagues will end up out of work. For once, the language in recent memos is refreshingly free of corporate jargon.
"This is not a reflection on them, they are our partners and friends, and parting ways with them has been the most difficult decision in my 23 years leading this firm,” said Edelman.
As Weber Shandwick CEO Gail Heimann described her own agency’s layoffs: "We have to part ways with a number of colleagues from around the network, people who have made good things happen for our firm and clients. People who are friends. It is something I hoped I would not have to do; it is a wrenchingly hard decision to make. And I know it is indescribably hard for those to whom we are saying good-bye.”
Thankfully, after a week that reminded us of the importance of action, agencies are offering more than just words. Many are extending health insurance benefits and providing professional career assistance, while the response to various jobseeker support initiatives, including our own, has been gratifying.
Even so, there are valid questions that can be raised about business models that prioritise profit over people. Those queries are likely to become more acute as economies reopen. More importantly, though, the emotional toll will be harder to address, for those left without a job, and those that feel guilty by virtue of survival.
All of this takes place against an ominous backdrop of political turmoil and violence from Hong Kong to New York, and many points in between, much of it state-sponsored. We have examined, in detail, the ramifications of the ‘age of rage’ for corporates; perhaps we should be more worried about its impact on people, and on human bonds that are visibly fraying.
For an industry that is purportedly built on its understanding of 'the public’, these are critical challenges. But understanding alone will not be enough, not least because corporates and agencies can drive more change than they probably care to admit. At a time of systemic angst, furthermore, it has never been more clear that people are weary of empty platitudes when real action is required.
Businesses love to talk about purpose and social good. No one said that delivering on those promises would be easy. But we need companies to help us get through this — all of this — because the economic and emotional toll calls for all of the support and resources we can muster.
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