Ad Agency's Layoff Lottery: Bold or Boneheaded?

Ann All

Earlier this week I wrote about the possibility of companies employing such tactics as across-the-board salary cuts or shorter work weeks in an effort to avoid mass layoffs and keep employees on the job longer in tough times. While interest in avoiding layoffs is high, sometimes they are a necessary evil. About a month-and-a-half ago, IT Business Edge blogger Rob Enderle wrote a post on the right way to do a layoff, for companies finding themselves in that position.


Among Rob's bits of advice (which he attributes to Guy Kawasaki): Know who your most valuable employees are and which are the most critical projects, so you can make the appropriate cuts without damaging the company. Rob likens this to "locating the critical arteries before making the first incision." He writes:

If you cut in the wrong place, the patient, or in this case the company, dies. Any layoff should protect and reassure the critical people and not break a critical process or project. In short, there should always be clear knowledge of where cuts cannot be made, so that if you have to do a layoff, it doesn't do more damage than good.

So, what to make of the Brussels advertising agency, So Nice? The company's co-founder sent an e-mail to some 100 clients asking them to choose which So Nice employees would lose their jobs. According to Advertising Age, the e-mail included a link to a Web site where each of the agency's employees made a case for their continued employment. In five days, the site drew 30,000 unique visitors, who cast 17,500 votes.


In his e-mail, co-founder Laurent Duffaut called the move "immoral and unjust," but said it was designed to "help(s) people put themselves in the place of a real employee or a real boss" struggling with a tough decision. Of course, the move may have been mostly a way to guilt clients into paying their bills. Duffaut says it also attracted the attention of potential new clients (who may have found the Web site creative and/or gutsy), which may mean no one loses their job for now.


The move drew mixed comments from folks reading the Advertising Age article. Wrote one who called himself Joe Mamma: "It's not my job to manage their business and if they feel they can use such a passive aggressive means to guilt me into changing the relationship, then I don't want them managing mine." In a similar view, a reader named William Crandall wrote "the last thing any client or new biz prospect wants to hear is that they are responsible for heads rolling at an agency."


Another reader from Minneapolis called it "a daring and great initiative." Robert Hoot of Hoot Communications wrote that, if nothing else, Duffaut's e-mail should make folks aware that their decisions to delay payments may create "a cascading effect" and result in drastic actions for cash-strapped vendors.


By the way, like Rob I am a fan of Guy Kawasaki, and I think Kawasaki's post entitled The Art of the Layoff deserves to be revisited. Though written in 2006, his advice is more applicable than ever today.


Interestingly, though several folks I interviewed for my article on creative alternatives to layoffs mentioned offering voluntary separation packages as a feasible strategy, Kawasaki doesn't seem to agree. At Apple, he writes, they used to joke about holding a meeting that was ostensibly for employees who wanted to quit. The "punch line:" Those who didn't attend the meeting would be let go. Those who did would be retained because they were sharp enough to find opportunities elsewhere. He writes: "The point is that if you let people choose to get laid off or retire, you might lose your best people."


Kawasaki also points out that a layoff can be a good thing because it allows companies to terminate its marginal employees with relatively little muss-and-fuss. That's good for separated employees because a layoff doesn't carry the same stigma as being fired. And it's good for remaining employees if they see that the company made wise choices in who it chose to let go.

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