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Why cutting PR departments in redundancy rounds is a false economy

by | Feb 24, 2023 | Public Relations

Spring is in the air—from snowdrops blooming to blue skies and the days getting noticeably longer—but it appears the economic gloom is not lifting. The International Monetary Fund has warned that Britain is expected to be the only large industrialized country to face an economy shrinking by 0.6 percent this year. That would make the UK set to see the worst performance of all G7 economies.

Facing the headwinds of the post-lockdown economy and inflation of around 11 percent as well as higher energy bills, businesses are already taking action and mass job losses look inevitable.

Up to 18,000 jobs are set to go at Amazon, which is closing three UK warehouses, Google has cut 12,000 roles worldwide and Microsoft has axed 8 percent of its workforce.

While the stark reality of the UK economy means that some layoffs are unavoidable, there is a right way and a wrong way of handling redundancy

One of the worst examples of how to treat employees was when staff at P&O Ferries were told by video message that 800 British crew were to lose their job and ‘Your final day of employment is today.’ P&O’s behavior united workers, unions and politicians in outrage. They may have saved money but it was hugely damaging to the company’s reputation.

However, a year on and companies don’t seem to have learned the lesson. Amazon, for instance, did not announce its plans to cut 18,000 staff until its hand was forced by a leaked memo, and Google’s parent Alphabet recently laid off 12,000 members of staff, first by a pre-dawn email and then by locking them out of the company’s systems and disabling security badges.

It may sound simple, but firing people via a cold email or a dispassionate Zoom call with hundreds of people is not just bad for internal motivation—it can cause long-term damage to a company’s reputation. This is particularly the case for any business in the public eye as redundancy processes can make national news, significantly affecting a brand and reducing customer engagement and loyalty.

It is therefore important for a business to plan what it is going to tell internal and external stakeholders about why jobs are being cut and take proactive steps to mitigate the impact

Ironically though, at the very time when communication departments are most important, marketing and PR budgets are often slashed. While this response is perhaps understandable, every single organization in the world relies on its reputation for success, so cutting PR during economic hardship is a false economy.

To ensure a sensitive and coherent approach to the redundancy process, communication teams should be at front and center of any strategy, with detailed briefings for senior leaders on how to communicate with stakeholders.

For instance, while it did not change the reality of mass redundancies, Meta, which owns Facebook and Instagram, can be praised for how it communicated its difficult decision to cut 11,000 jobs after a sharp decline in revenue. CEO Mark Zuckerberg penned a lengthy email to all staff in which he apologized for the outcome, took accountability, and explained the decision-making process in detail. In doing so Meta was able to control the narrative and avoid unwanted information from being leaked to the press.

With a proper plan in place, communication can also be invaluable when answering many questions that might arise from remaining staff about the job cuts and how they affect them

Companies who understand the importance of good communication, even when delivering bad news, are therefore most likely to be able to handle any redundancies in a responsible way, ensuring staff feel supported. By having a clear plan, they can ensure that they communicate with staff, stakeholders and the in an open and honest way, limiting any long term reputational damage.

Louise Stewart
Louise Stewart is Partner at Penta.

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