The global economic situation remains dire, with profit warnings
and downbeat trading statements competing for business-page space. There
have been job losses across the board. There have been obvious victims
of the technology and telecoms slump, such as BT's 13,000 pencilled in
redundancies and the exodus from former industrial behemoth Marconi. But
even in blue-chip old-fashioned sectors such as the postal service, the
rebranded Consignia issued a statement last month confirming the
likelihood of an expected 30,000 - or 25 per cent of UK staff - facing
If the picture is bleak for the economy at large, it's bleaker still in
the media and marketing sector. Newspaper groups, magazine publishers
and, most pertinently, marketing services groups have shed staff like
The biggest losers in the PR world are those whose businesses proved no
longer viable - Kable, Anderson Soames and Evus were among the early
fallers. But these were all small firms in niche sectors overly exposed
to one, or maybe two, big paying clients. For the top 20 global PR
networks the problem of survival is less pressing than that of
protecting profit margins - especially when management bonuses in
US-owned groups are often linked to this particular index of corporate
It is therefore especially embittering to note the culls that have
transpired at companies such as Ogilvy PR, Weber Shandwick,
Burson-Marsteller, Hill & Knowlton, Fleishman-Hillard, and Edelman PR.
Add these to the job losses at this and last year's PRWeek Consultancies
of the Year, Consolidated and Firefly Communications respectively, and
there is a grim tale to be told.
It is common knowledge that PR firms are bad at PR-ing themselves, but
the allegation that the industry doesn't listen to its own advice is
particularly hurtful when that advice focuses on communicating
internally through a recession and maintaining staff morale through
sound internal comms.
In the words of one leading change management or internal comms guru,
the PR industry is made up of 'cobbler's children' - so consumed in the
process of dispensing service to outsiders they neglect their own
This may be unfair. Given the extent of the job losses in PR - some
estimates say a shakeout of ten or more per cent is to be expected if
budget squeeze is happening as much as anecdotal evidence suggests - it
is surprising how little rancour appears to have been created by the
spate of headcount culls that rushed through the industry in the second
half of 2001.
The agencies themselves are reluctant to discuss the sort of painful
episodes that no manager enjoys. A dozen firms called PRWeek to enquire
as to the subject under the microscope in this piece, only to run for
the hills upon being informed of the question up for discussion - when
it comes to internal comms during restructuring, does the PR industry
practice what it preaches?
Those agencies that do speak openly about the restructuring process
maintain that everything was done by the book. Firefly axed almost ten
per cent of its staff - a mix of client handlers and administrative
people - four months ago (PRWeek, 12 October 2001). MD Claire Walker
says the two crucial messages to convey to staff are that there is no
shame in facing the chop and that there is a continued bond of trust
between the employer and the ex-employee.
If managed successfully and repeated, these mantras can minimise the
hurt and emotional damage caused by a process she describes, frankly, as
'It is crucial to communicate the fact that there is no stigma to being
made redundant. All staff needed to realise that outgoing people were
not "fired" - their jobs simply ceased to exist. So there was no stigma
attached to them either as people or as professionals. We organised cash
collections for presents and some departing staff had leaving drinks
organised by us,' she says. ' We still try to keep in touch with
everyone that was made to leave and the majority had found new positions
within two months. Others took the opportunity to go travelling.'
One of the most unsettling aspects of redundancy is the shame of being
accompanied from the building by a director, lest you pick up business
sensitive information on the way to the door. There was, Walker claims,
none of this at Firefly.
'Communicating the idea that there is continued trust is essential. They
had free rein in the office to collect their belongings, say goodbye to
their colleagues and friends, and collect and build their portfolio.
We helped some write CVs, gave computer and phone time to research and
make calls, gave access to our library and resources for research
opportunities, and access to senior staff members for counselling and
support,' Walker adds.
If Firefly is a texbook case of how best to utilise internal
communications precepts to soften the blow of redundancy - and the
volume of bitter calls to PRWeek from some agencies' departing staff was
mirrored by Firefly leavers' silence - it is a lesson many PR firms
refuse to learn.
Although few internal comms experts were willing to speak on the record
about this issue, one source says most of the fundamentals of good
internal comms are routinely ignored by the community that espouses them
'Communications firms provide their clients with some awesome internal
comms programmes, but fail to take the same care over their own,' says
There are, it seems, four basic principles to follow when laying off
staff: to be open and honest about the extent and cause of the problem;
to avoid overpromising about the ability of corrective action to remedy
the situation; to pay attention to the professional and pastoral needs
of survivors; and to offer 'placement support' for ousted staff to
assist them in relocating elsewhere. 'In general, PR firms are brisk and
harsh about it, with tales of people being forced from the building
quite common,' an industry source says.
Andraea Dawson-Shepherd, a board director at internal comms consultancy
Hedron - whose clients have included Lloyds TSB, the Inland Revenue, the
BBC and Cadbury Schweppes - has her own horror stories: 'I am aware of
extreme situations when people asked to do the cull are themselves
jittery about their jobs and have not been briefed on the extent of the
situation before they are asked to take the flak for most of what
follows,' she says.
Dawson-Shepherd says the key problem for communications firms is
misunderstanding the nature of internal comms: 'It is not internal
marketing, though it is often treated as such. If all staff have been
asked to make cuts in outgoings and have seen client budgets shrink in
the previous months, they'll lose respect for the company if they feel
they are being bullshitted.'
On the matter described by all internal communicators as The Golden Rule
- to be straight and honest about the problems your company faces - the
PR and communications consultancy industry appears to fare well.
Bill Quirke, MD of internal comms firm Synopsis Communications, says:
'PR companies are good at giving context so it doesn't come as a bolt
from the blue.'
This is not because PR firms are run by intrinsically more caring folk -
though they may be. It is because of the structure of such firms which
sees even the most senior managers in such a hands-on role that they
spend time handling customer complaints and running staff training
schemes in a way it is impossible to imagine the CEO of a FTSE 100
But the key problem for PR firms is a lack of awareness of best practice
in this field. The list of firms that consulted with internal comms
experts before embarking on the process of retrenchment is a short one
(even if it includes some industry big hitters, such as Brunswick).
Quirke says PR agency heads get too hung up on being nice: 'Some try to
fudge the pain and assume that that is good practice in internal
Others come on all businesslike. They swing from one to the other when
the middle ground - a mix of openness, honesty, speed and compassion -
would be the most fertile.'
The economy is not yet growing at pace, though there are green shoots of
recovery popping up in some areas. Anecdotal evidence suggests
recruiters are slowly starting to hire again, and the growth in client
business can only speed up that process later in the year. It is likely,
therefore, that we have seen the worst of the redundancy splurge this
time around. But economic cycles being what they are, PR and
communications firms would do well to learn the lessons of this downturn
- the lessons they offer their clients - for the next time the
unpleasant business of job cuts strikes again.
JOHN MAHONY, EDELMAN PR WORLDWIDE
No major global PR network has proved immune to the downturn.
Privately-owned firms such as Edelman PR Worldwide have been hit hard by
clients' nervousness in the face of an international economic
Edelman's UK operation is run by CEO John Mahony. Regarded throughout
the industry as a manager who cares more for people than processes, it
was especially galling for Mahony to have to reduce headcount at the
firm's Haymarket offices in London by 15, to just over 100 last
'The whole process was extremely painful,' he says.
The crucial thing, Mahony says, was to ensure the process happened
quickly. And by quickly, he means that with the exception of a handful
of office confidantes, the staff all learned of the scale of the
operation - ten per cent were to lose their jobs - and its impact within
the space of one afternoon.
'We gathered everyone together at 12.30 on the Monday,' he recalls. 'I
explained there simply wasn't the business to justify the staff count we
were carrying and that certain roles would not be carried forward. I
then called all those who were to leave in to my office one at a time.
By 5.30 I was able to send an e-mail to everyone apologising for hurt
caused but explaining again the rationale behind taking a deep cut into
our cost base in order to best survive and prosper.'
In order to retain the support of the survivors, the agency boss has to
be generous with those who move on and magnanimous with those who
The first part of this, Mahony says, is the most crucial: 'They hadn't
done anything wrong and that needed to be repeated again and again in
A second obligation, which helps reinforce the key message that axed
staff have not been fired, is to assist them in getting new jobs.
'The entire 125 staff were enjoined in the task of securing work for
those who moved on - opening our contact books, selling staff to clients
and recommending them on to rival agencies,' Mahony says.
With a success rate three months later of more than 80 per cent - Mahony
is as pleased as can be expected with what was always going to be a
difficult scheme to push through.
'For some it doesn't matter what you do - you can't please all the
people all of the time. But if the survivors inside the company get the
clear message that you only did what was necessary, they will try harder
to avert further rounds of cuts,' he adds.
The key, he says is simple: 'Tell 'em you're gonna do it. Tell 'em when
you're doing it. And tell 'em when it's done.'
ANONYMOUS EX-BOARD DIRECTOR
John Smith (whose name has been changed to protect his identity) was a
senior board director at a top consultancy until being made redundant
'Our internal communications advisers would not advise clients to call
threatened staff in to be told of their departure just an hour before
forcing them from the building,' he says.
'Clients would be warned to take into account the views and perceptions
of all internal and external audiences. The way my then agency did it
seemed to be that we would read about the impending job cuts in PRWeek
before being told of them by our own managers,' he adds.
Smith was at an external client meeting when he received a call from the
MD's secretary asking him to return to base.
Upon arrival, a senior board member - whom he had never met before and
who was based outside London - appraised him of the situation and told
him 'at the end of this conversation, you will gather your personal
effects and leave the building,' he recounts.
It left a sour taste in the mouth, as did the immediacy of the
announcement. There was no room for a formal handover of client duties
to remaining staff.
Those who remained at the agency informed him it was a full week before
a group meeting was called to explain to survivors the logic of the cuts
and to express the hope they would solve the emerging problem.