Arvind Hickman
Jun 3, 2020

Edelman to cut 390 staff globally due to pandemic impact

Edelman is reducing its global workforce by nearly 7% as the impacts of the coronavirus pandemic completely erode its profit margin.

Richard Edelman:
Richard Edelman: "Most difficult decision" in 23 years leading the firm.

Edelman is cutting 390 employees worldwide as the business begins to make a net loss due to the coronavirus pandemic. Edelman CEO Richard Edelman described it as the hardest decision he has had to make in 23 years leading the firm.

The “gut wrenching” decision was communicated by Edelman at a virtual town hall to staff Tuesday, and arrived only three months after he promised to secure all jobs during the pandemic.

He said the consultancy is no longer able to sustain its business without “layoffs, furloughs, reduced work weeks and additional compensation reductions of mostly senior people scaled by salary level”. 

The drastic measures include a reduction of 390 employees (about 7% of its workforce) worldwide.

In March, Edelman had pledged not to make a single redundancy due to the coronavirus pandemic. But the economic realities of its impact have forced its hand, despite the business being able to resists job cuts in the two previous recessions in 2001 and 2008.

“Today, despite all efforts, we are beyond the threshold of loss-making and to ensure the long-term health of our business, I must change course,” Edelman said.

“This decision is gut wrenching, especially as I told to you in March that we would have no job losses due to the pandemic. I said we were prepared to take the business down to zero profit. We did not want to get into loss-making, but I said our intention was to press ahead until we could do so no longer.”

Edelman explained that in February, the business was on track to report 2% growth, even with some COVID-19 impacts in Asia.

In March, the business was operating at an 11% margin, but that has deteriorated to “a slight net loss and our cash reserves are being used to offset slower receivables”.

Edelman explained: “As a business, we have suffered a succession of body blows. This is a truly global recession. 

“No office, market or region escaped its impact. We expected the first wave of declines in March, from travel, hospitality, automotive and airline clients whose business faced historic declines in demand. Then, came massive cuts in our energy business as oil prices sank to 20-year lows, which have had a greater breadth and depth of impact on our business.

“We pulled on every available lever to stave off this decision by reducing our operating expenses. These actions included reducing compensation for executives on our global operating committee by 15% to 20%, ending the use of freelancers, temporarily pausing our internship program, hosting a virtual global strategy meeting, limiting external recruiting to only a handful of critical roles globally and slowing internal promotions. 

“As a family business with zero debt and cash reserves, this swift reduction of operating expenses allowed us to maintain staff levels and salaries until this point. 

He added: “Now, in June, we must part ways with talented and wonderful colleagues across the network. 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.”

For those leaving the agency, Edelman has promised to provide career transition services, employee assistance programming for six months, LinkedIn learning, networking for opportunities and a $1,000 credit towards personal technology or other measures to help impacted staff.

“For those of you leaving, I am profoundly and deeply sorry. The thought of how this affects you and your loved ones has given me many sleepless nights. My gratitude to you is heartfelt, and you will be deeply missed by me, as well as your colleagues and friends,” Edelman added.

“I continue to have deep confidence in our strategy premised on earned reimagined and trust. Given the profound challenges the world faces, there has never been a more important time for a communications firm that can help business fulfill its role in healing our society.

“To all of you, I remain in awe of how you have rallied to support one another and our clients despite the extraordinary times. I see your determination and commitment and it sustains my confidence that we will fight our way back. For that, and for what you do every day for this company and our clients, thank you.”


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