Back in March, Edelman, the world's largest PR consultancy, declared that the jobs of all its 6,000 staff worldwide would be preserved despite the COVID-19 situation. Just three months later that resolution has fallen through as the business goes into the red, and on June 2, owner and CEO Richard Edelman announced that the firm will be cutting 390 jobs worldwide, or seven percent of its global workforce.
“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,” he told employees at a virtual town hall. “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 percent, 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."
Describing the job cuts as "gut-wrenching", he said: "This is not a reflection on [the affected employees], they are our partners and friends, and parting ways with them has been the most difficult decision in my 23 years leading this firm.”
He added that the firm will continue to support affected employees with career transition services, employee assistance programs including upskilling and networking, and even a US$1,000 credit towards personal technology that may help them find a new job.
Edelman, which has 60 offices around the world, was previously able to come through recessions in 2001 and 2008 without job cuts. However, COVID-19 hit many of its large clients in industries such as aviation, hospitality, and auto manufacturing.