Last Wednesday we each paid our respects to the victims of the Sept. 11 terrorist attacks in our own way. For at least one company that meant telling a dozen workers their services were no longer required.
Pulsent, a digital imaging company in Silicon Valley, took the odd step of eliminating twelve jobs on Sept. 11, 2002 and informing the affected employees of the company’s decision that day.
“I also left word with Pulsent’s public relations expert. Which raises a question: Could a company that lays off workers on Sept. 11 actually have a public relations expert? He hasn’t called back either,” Mike Cassidy of The San Jose Mercury News wrote in his column this week.
Learn a lesson from Pulsent: steer clear of emotionally sensitive times when it comes breaking bad news.
Pulsent most likely wanted to keep its layoffs quiet, as do many small tech firms still battling it out in a sorry economic landscape. The best way the company could have done this was by informing the affected workers of their fate on September 13. Friday is a traditional layoff day to begin with and Cassidy’s column points out the workers were each given two-weeks severance. The traditional payroll period for companies ends or begins on the 15th of the month, which would have fallen on Sunday. Believe me, writers know basic facts like this and use this to help shape a story angle. So reason stands that the workers would be paid for the remainder of the week and paid out through the end of September, so what was the company thinking?
Pulsent wasn’t thinking. The company did not respond to Cassidy’s calls for comment and what would have been a non-story turned into a public relations disaster for the company. It’s doubtful that anyone would have paid attention to a little known tech firm laying off a dozen workers, but because they did it on a national day of mourning, Pulsent ended up looking like a smarmy little outfit. And Cassidy nailed the company on a stupid move. Pulsent’s best chance to avoid a damaging article would have been to return Cassidy’s calls and spin it in some way.
“The choice of the termination date was unfortunate, and it is unfortunate that we were forced to eliminate any jobs. However, after reviewing our options, we were left with only one choice and by a sad coincidence that meant informing workers of their dismissal on Sept. 11. We’ve apologized to those affected for the ill-timed notification,” is what Pulsent could have told Cassidy. Who knows, he could have moved onto another story and chalked it up as no big deal.
But what made matters worse is the fact that Cassidy was able to get a member of Pulsent’s Board of Directors on the record.
“I don’t think it was tied or untied to Sept. 11. I think they did it as soon as they identified the need,” Bob Marshall, a Pulsent board member told Cassidy.
A reader should ask himself: why didn’t the company directly respond to requests for comment and why did the board member say “I don’t think,” shouldn’t he know? Once again, the timing of the layoff must be questioned because the board member says he thinks it took place “as soon as they identified the need.” An extra day never hurt anyone, but it could have been spun to make it sound like the layoffs simply had to occur on Sept. 11. What a mess. But I’ve seen worse.
Two years ago I was working for a dot-com based in New York and we went through a bit of a “restructuring.” I was one of the fortunate people who kept my jobs, though I would have loved to been laid off at the time. Our company had received some decent press coverage at the time and in the New York dot-com circle was well known. So when we laid off a bunch of people and installed new management, it was news.
Now watch what happens when a reporter from Silicon Alley Daily called the company for comment:
“‘I can’t confirm or deny’ all those staff members were let go, said COO Overdorff. She would say, however, that, ‘We’ve added more than 20 people over the last 60 days, most in our advertising sales force.'”
Ok, so the COO is saying the company may have let some people go, but that the company also hired more than twenty people in the last sixty days (she was lying as it stands, our ad sales staff never numbered more than six when I worked there). Interesting spin there.
What comes next is possibly one of the worst quotes in the history of business:
“‘There are some employees who wouldn’t have fit in at any organization. [The company] had been running since April without a management team. There was nobody on it over the age of 30 — not that age is an issue here,’ said Steve Brotman, whose Silicon Alley Venture Partners helped raise $700,000 in seed money for the site a year ago, and contributed again to a $6 million round last winter.”
Let’s dissect the problem here:
1. A newly installed COO who does not confirm or deny that some staffers were let go.
2. A company investor essentially says that employees were let go and then goes about trashing their qualifications.
3. That same investor then trashes the company’s management, who he somehow saw fit to help raise $6.7 million for.
4. And lastly, the investor brings up the issue of age and then says it’s not an issue.
When you add it all up, you’ve got another PR disaster on your hands. Since I have intimate knowledge of this incident, let’s see what happened behind the scenes.
1. Company installs news management and immediately eliminates a quarter of the staff. No big deal considering the “dot-com downturn” was in its beginning stages and new management usually means a new direction for a company.
2. Upset laid off worker (one would think, we never found out who the leak came from) contacts a reporter and says, “These idiots came in and axed a quarter of the staff, check it out.”
3. Reporter calls company for comment and gets an inexperienced PR person on the phone (she was terrible).
4. PR person hands the call to the newly installed COO who won’t confirm or deny what happened, but does try to spin it positively. The PR person and the COO have flipped out by now and don’t know how to handle the situation.
5. Reporter, apparently not satisfied, calls one of the company’s investors and gets a quote that makes everyone wonder.
6. The story hits and the company’s phones ring off the hook with partners and customers expressing concern. Further, they wonder why the company’s own investor would make disparaging remarks about the company’s employees.
7. The company’s remaining employees are upset to begin with because they’ve got “survivor’s guilt.” This problem is now compounded by the fact that the entire world now knows the company sucks.
8. The new COO and the investor attempt to apologize to the remaining staff, but it’s no use. Within weeks several key employees (ahem, including myself) leave the company and wish it good riddance.
Could this entire situation have been avoided? Of course. The problem started with the people who made the decisions and how they handled it in the first place. But the problem became when public when the PR person, COO and investor didn’t know how to handle the media. There was no meeting before the internal announcement to determine how the company would handle media inquiries into the matter. There was no coordination at all and employees were never told, “We ask that you keep this information private and we help those affected find new work.”
There was a real and serious backlash to this story, believe me, I had to live through it. This story hit the media on a Friday and it happened to be my birthday. I had decided to finally take a day off work and I had to wake up and read about how my company was basically a poorly-run organization with executives and investors who couldn’t handle a simple press inquiry. Consider how the rest of my co-workers felt when our company’s dirty laundry was aired publicly and all because no one knew how to handle the press.
Instead of being a mere footnote, our company’s layoffs turned into full-blown scandal. And instead of simply telling twelve people that they couldn’t afford to be employed anymore, Pulsent’s layoffs turned into a column about how stupid the company apparently acted.
The lesson here is simple: when your company (or client) is going to do something negative, be prepared. Have a single point of media contact and do not let anyone else speak on behalf of the company. Take into consideration external factors and timing and most importantly, be humane to anyone who could be affected by the negative news. In both of the cases I’ve written about it’s obvious that an upset former co-worker tipped off the media. Remember, your employees are part of your PR strategy and when you upset them, employed or not, it can have serious ramifications.
This article, written by Ben Silverman, originally appeared in PR Fuel (http://www.ereleases.com/prfuel), a free weekly newsletter from eReleases (http://www.ereleases.com), the online leader in affordable press release distribution. To subscribe to PR Fuel, visit: http://www.ereleases.com/prfuel/subscribe/.