Martha Stewart’s Bad PR Continues with Holiday Layoffs

 Martha Stewarts Bad PR Continues with Holiday Layoffs

THE PR VERDICT: “D” (PR Problematic) for Martha Stewart Omnimedia

An unwritten rule in publishing used to be no layoffs between November and January. No company wanted to appear either heartless or desperate and ruin employees’ holidays. But just as print gives way to digital, so the old rules are broken in favor of the first law of business: survival of the fittest. And so last Thursday, Martha Stewart Omnimedia terminated 100 employees, roughly a quarter of its staff, two weeks before Christmas.

The move itself isn’t that big a surprise for a company that has been losing money steadily in recent years. Ad pages in MSO magazines are down, and the company ceased publication of two titles, Everyday Food and Whole Living, earlier this year. Television productions have also lost revenue.

While the terminations may save some money, the timing of them does nothing to stanch the flow of negative publicity for MSO including the recent court case with Macy’s. Now come terminations at the behest of new MSO CEO Daniel Dienst, described as a “veteran turnaround expert” by the Wall Street Journal. Stewart released the quote, “Dan has specific expertise helping companies run efficiently and productively.” This season Martha’s holiday cheer gives rise to nothing but scorn for the 100 employees whose got a gift wrapped pink slip for Christmas.

PR VERDICT: “D” (PR Problematic) for Martha Stewart Omnimedia.

THE PR TAKEAWAY: Appearances can be aggrieving. When taking a company’s bottom line into consideration, factor in customer reaction. Martha Stewart caters to female consumers – specifically, homemakers. Really specifically, women who wouldn’t want their joyous holidays turned lean after being fired by a Scrooge. The timing for this could not have been worse. Tough decisions need to be made, no doubt, but timing in cases like this really is everything.

Bad News, Good PR: Law Firm Airs Its Own Dirty Laundry

 Bad News, Good PR: Law Firm Airs Its Own Dirty Laundry

THE PR VERDICT: “A” (PR Perfect) to Weil Gotshal & Manges.

When it comes to managing bad news, the smartest folks are usually the attorneys. A lesson in managing bad news came last week from Barry Wolf, executive partner and chairman at legal firm Weil Gotschal & Manges. The firm released an internal memo announcing 60 junior-level and 110 staff layoffs, as well as ”meaningful compensation adjustments for certain partners ” – PR code for pay cuts.

Weil freely shared the memo with reporters, and the news received extensive coverage, including page one of the Wall Street Journal and the lead BusinessDay story in the New York Times. No one was surprised that Weil was  committed to sustaining its $2.2 million annual profit-per-partner metric and while some lawyers lamented that the elite firms, known as “Big Law,” have succumbed to the realities of big business, the firm positioned itself as being ahead of the business curve, actively managing a business undergoing macro changes.

That’s a message its corporate clients understand all too well. Weil effectively neutralized most of the potential bottom-line impact that might have initiated a loss of confidence. Internally, the firm may have more work to do. Morale will continue to suffer as departures leave behind empty desks and lawyers reassess their careers, but for the outside world, the firm looks ahead of its peers.

THE PR VERDICT: “A” (PR Perfect) to Weil Gotshal & Manges for candor, transparency and proactive management of bad news.

THE PR TAKEAWAY: Address a difficult issue head on – before others do it for you. While this wasn’t a case of crisis management, it could have been a serious reputational blow if facts emerged slowly, forcing the firm to go on the defensive. Instead, Weil comes out a leader for addressing a difficult issue, laying out the rationale and taking careful action. Ironically, given that other firms are likely to follow suit, a management decision to shrink the firm enhances Weil’s leadership for both the long and the short term.