Join BI PrimeEdelman is laying off 7% of its global workforce, or about 390 people, and asking for salary reductions from 5% to 20%.
Unlike past recessions in 2011 and 2008, where the agency only had to temporarily reduce its senior compensation, Edelman has come to a crossroads — "beyond the threshold of loss-making," Edelman writes.Edelman had drops in business across travel, hospitality, automotive, and airlines because of the pandemic, the memo states.
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.
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 15-20%, 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.
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