Think you can keep a layoff secret? HMV proves otherwise

Posted on January 31, 2013 8:56 am by | Crisis Communication | Internal | Media

Layoffs at HMVAs manager of Employee Communications, I was informed early of an impending companywide layoff. Armed with the knowledge that some 10% of headquarters employees would lose their jobs, I drafted a letter from the company president to all staff explaining the situation and detailing steps the company would take to ease the transition of those affected, such as severance packages and outplacement services.

It was the mid-1980s. With email not yet an option, I proposed a desk-drop of the letter so employees would find it waiting for them when they got to work several days in advance of the event. The company president rejected the plan. If we distributed the letter, he insisted, a disgruntled employee would send it to the local media and our negative story would be splashed all over the press.

I explained what would happen if employees heard nothing from leadership about the layoffs. (I was disheartened that I had to explain something so fundamental to the president of a Fortune 500 company.) He finally relented, but the letter could be distributed only on the Friday morning when the employees would be notified that they no longer had jobs. Of course, a disgruntled employee sent it to a local newspaper, and in short order news of the layoffs appeared in multiple news outlets, including The Wall Street Journal.

The president made a deliberate trip to my office, tossing the newspaper on my desk and snorting, “I told you this would happen.” I pointed out that the article’s explanation for the layoff was consistent with our own; it cited the rationale we had crafted for the internal announcement. Absent that letter, the media would have sought comment from any source they could find, most likely getting it wrong. He pondered that for a moment, then strolled out of my office.

I remembered this story today as I read about events transpiring at British music retailer HMV. Using the company’s verified Twitter account, an employee tweeted, “We’re tweeting live from HR where we’re all being fired! Exciting!!” In fact, 190 staff were let go from HMV this morning, although at the time, whoever had access to the official Twitter account thought it was less: “There are over 60 of us being fired at once!” a subsequent tweet read. “Mass execution, of loyal employees who love the brand,” read another.

The tweets were available to the company’s 63,000 followers along with anybody who read the countless retweets, with momentum added by the hashtag #hmvXFactorFiring.

The story is now trending, with coverage from The Huffington Post, Yahoo Finance, FastCompany, and other mainstream news organizations.

Some online speculation suggests the perpetrator of the tweets was a fired community manager. Whether that’s true, a lot of organizations will no doubt begin questioning the wisdom of giving employees access to tools they can use to stir up controversy. New policies are inevitable at businesses worldwide to ensure those being terminated have their passwords revoked before they can cause any problems. Others will wonder if they should have Twitter accounts at all, given how easily they can be abused.

The agitation the HMV story is bound to create is amusing in light of my mid-80s experience. Imagine thinking you can actually keep a layoff secret these days!

The solution has nothing to do with a company’s social media accounts, whom the company hires to manage the accounts, or the steps taken when the company knows it’s going to downsize those employees (although that’s not a bad idea). In fact, the solution to this social media-induced crisis for HMV has nothing to do with social media and everything to do with transparency.

As I counseled my president, you need to let your stakeholder audiences know the layoffs are coming.

I know this contradicts conventional wisdom, but the reality is, in this era of 140-character news cycles, a company has no chance of controlling whether or when the news hits the streets once employees know. No steps you take can keep a distressed employee from telling the world. What’s more, when employees understand the rationale, they may still be unhappy but now comprehend what’s happening to the point that they won’t tweet a message like, “Under usual circumstances, we’d never dare do such a thing as this. However, when the company you dearly love is being ruined and those hard working individuals, who wanted to make hmv great again, have mostly been fired, there seemed no other choice.” (As of now, all those tweets have been removed and the latest message, about a sale, date back to January 14.)

HMV website noticeNot so coincidentally, the HMV website has been replaced with a stark notice announcing that three Deloitte LLP insolvency practice advisers have been appointed Joint Administrators of the company. “The website HMV.com has been suspended following the appointment of the Joint Administrators,” the notice reads. “No purchases can be made online until further notice.”

It’s hard to imagine the ex-employee with the keys to the Twitter account knew how dire the company’s situation was.

Candor, proactive communication and transparency—along with compliance with regulatory requirements around disclosure and other aspects of a layoff—must guide our ’ approach to these kinds of announcement. It’s the only way to ensure you don’t have to respond to misconceptions created by unofficial disclosures by people who are not in possession of all of the facts.

 

Comments

  • 1.Great write up.

    This is the best coverage and commentary I've read so far, thank you.

    Craig | February 2013 | London

  • 2.You seem to think that the statement appearing on HMV's website has happened recently and is somehow related to the Tweeting incident. It's actually been there for many weeks, and the situation of the company has been very widely reported here in the UK for quite some time, so there is nothing 'coincidental' between the tweeting incident and the statement. The HMV website ceased to exist/continue accepting orders on the 15th January.

    "It’s hard to imagine the ex-employee with the keys to the Twitter account knew how dire the company’s situation was."

    It is actually entirely possible, and very very likely, that the employee who tweeted knew exactly how dire the situation was in the run up to the mass-firing. There has always been the fear of job losses, ever since they went into administration, and even more so once the Irish stores all suddenly closed and sit-ins had to be staged to secure wages still owed.

    AW | February 2013 | UK

  • 3.I appreciate the correction, AW. I tried to find references to when the Deloitte statement appeared but nothing turned up and the notice itself wasn't dated except for noting the date Deloitte's personnel were named Administrators. Still, seeing the notice on the website and being informed exactly what to expect by the organization are two entirely different things. Employees can read news reports and hear rumblings, which only exacerbates anxiety and could, in fact, lead to even greater distress when the layoffs finally occur. In this case, transparency would be even more crucial to avoiding the kind of repercussions the company has been facing.

    Shel Holtz | February 2013

  • 4.As a public relations practitioner your job is to communicate as smooth and efficient as possible. Advising the CEO or head of the company to warn employees that a layoff is coming is the best solution so people will not be too surprised when major changes start to happen around the company. Social media is growing more rapidly each day, and changing the company's passwords to executive accounts is a great idea when many people at one time are getting laid off. The internet is a great tool, but it can also be a company nightmare if someone who is not supposed to have access to the password has access to it.

    Ahna Schamore | March 2013 | KY

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