Communicating Difficult News

Recently, the CEO of the tech mortgage company, Vishal Garg, invited 900 of the company’s employees onto a Zoom webinar. During the webinar, which only lasted about three minutes, he told all of the people attending that their contracts had been terminated. The employees were watching the webinar of the CEO when he announced on screen that all 900 of them would be losing their jobs, which is about 15% of the total staff at the company.

Garg told the attendees that everyone who was invited to the call was part of the unlucky group of people that were being laid off, with the termination being effective immediately. All of the employees whose contracts were terminated would also receive a month’s worth of salary as well as three months of benefits, according to the CEO.

Among the unlucky group of employees was the entirety of the tech mortgage company’s diversity, equity, and inclusion recruiting team, according to CNN and the head of the division Ivori Johnson. In fact, according to Johnson, the employees that were affected by the termination had been logged out of their computers that were issued by the company itself even before they were notified of their termination.

The CEO said during the webinar that this had been the second time in his career that he’d found himself in such a situation , that he didn’t want to do such things, and that the last time he’d gone through the same thing, he’d ended up crying. While the CEO had been using very empathetic wording during the webinar with the terminated employees, his tone was very cold, making the entire webinar very short and emotionless.

After that webinar, the company’s CFO, Kevin Ryan, released a statement in an attempt to soften the message that 15% of the company’s staff was fired a couple of weeks before the holiday season. However, the story didn’t end there, as a news outlet confirmed that the CEO had been berating some of the terminated employees with anonymous messages on a professional network called Blind. According to the messages, the CEO claimed that about 250 people of those that were terminated had only been working for 2 hours a day while clocking in for an entire workday or more in the payroll system, which, according to him, meant that they were stealing from the consumers and the company.

To make matters worse, the company also went public through a SPAC back in May, and during the first week in December, when all of the employees were terminated, the company also took in a $750 million cash payment from the deal. Despite the CEO’s claims of the aforementioned issues with the terminated employees, the company is valued in the billions and its balance sheet looks strong.

In the aftermath of the situation, three of the company’s senior executives reportedly resigned, and then the CEO issued an apology for his conduct. However, this story serves as an example to other companies of the importance of internal communication, which is an integral element of Public Relations.

That means sometimes, companies and PR professionals have to figure out the best ways to communicate bad news inside a company, such as mass job terminations like with The best, and really, the only way that companies can communicate bad news to their employees is with empathy, authenticity, and in a direct way. The person relaying the message should have an appreciation and understanding of how that news is going to impact everyone involved, otherwise, they’re not really prepared to share any sort of bad news.

Ronn Torossian is CEO of 5WPR, a leading PR agency.

Ronn Torossian

Ronn Torossian is the founder and Chairman of 5WPR, one of the largest independently-owned PR firms in the United States. With over 25 years of experience crafting and executing powerful narratives, Torossian is one of America’s most prolific and well-respected Public Relations professionals. Since founding 5WPR in 2003, he has led the company’s growth, overseeing more than 275 professionals in the company’s headquarters in midtown Manhattan. With clients spanning corporate, technology, consumer and crisis, in addition to digital marketing and public affairs capabilities, 5WPR is regularly recognized as an industry leader and has been named “PR Agency of the Year” by the American Business Awards on multiple occasions. Throughout his career, Torossian has worked with some of the world’s most visible companies, brands and organizations. His strategic, resourceful approach has been recognized with numerous awards including being named the Stevie American Business Awards 2020 Entrepreneur of the Year, the American Business Awards PR Executive of the Year, twice over, an Ernst & Young Entrepreneur of the Year semi-finalist, Metropolitan Magazine’s Most Influential New Yorker, a 2020 Top Crisis Communications Professional by Business Insider, and a recipient of Crain’s New York 2021 Most Notable in Marketing & PR. Torossian is known as one of the country’s foremost experts on crisis communications, and is called on to counsel blue chip companies, top business executives and entrepreneurs both in the United States and worldwide. Torossian has lectured on crisis PR at Harvard Business School, appears regularly on CNN & CNBC, is a contributing columnist for Forbes and the New York Observer, and has authored two editions of his book, “For Immediate Release: Shape Minds, Build Brands, and Deliver Results With Game-Changing Public Relations,” which is an industry best-seller. A NYC native, Torossian lives in Manhattan with his children. He is a member of Young Presidents Organization (YPO), and active in numerous charities.

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