In Era of Blog Sniping, Companies Shoot First
SAN FRANCISCO — During past downturns, layoffs were mostly a private affair. Big companies tended to issue vague press releases filled with jargon about “downsizing,” and start-ups often gave people the pink slip without telling the world anything at all.
Steven Carpenter, left, the chief of Cake Financial, with Laurence Toney, a marketing executive.
Chris Kalani complained on his personal blog about his treatment upon being fired from Jive Software in Portland, Ore.
Not anymore. In the age of transparency, the layoff will be blogged.
Elon Musk, chief executive of the electric-car company Tesla Motors in San Carlos, Calif., said that he had no choice other than to blog about the Oct. 15 layoffs at the closely watched company — even though some employees had not yet been told they were losing their jobs.
Valleywag, a Silicon Valley gossip blog owned by Gawker Media, had already published the news, and it was being picked up by traditional media reporters, Mr. Musk said. “We had to say something to prevent articles being written that were not accurate.”
Blogging about staff cuts is particularly prevalent in Silicon Valley, where tech gossip sites pounce on every rumor and Web-savvy employees broadcast their every thought on personal blogs and Twitter feeds. Companies feel pressure to break bad news on their own blogs so that they can better control the message.
However, experts in human resources and public relations say it is only a matter of time before companies of all sizes and in all industries will feel compelled to blog about painful news.
Every industry has Web sites that cover its companies and eagerly publish rumors, from the Starbucks Gossip blog to DealBreaker for the financial industry and BlueOvalNews.com for Ford Motor. Web sites like Glassdoor.com and JobSchmob.com also encourage workers to vent about their bosses.
“Today, whatever you say inside of a company will end up on a blog,” said Rusty Rueff, a former human resources executive at Electronic Arts and PepsiCo. “So you have a choice as a company — you can either be proactive and take the offensive and say, ‘Here’s what’s going on,’ or you can let someone else write the story for you.”
Gannett, the nation’s largest newspaper chain, ignored the blogosphere and paid a price for it. The company told publishers on Oct. 28 that it would lay off 10 percent of its staff. Jim Hopkins, a 20-year Gannett veteran who left the company in January and now writes the unofficial Gannett Blog, had been reporting rumblings along those lines for several weeks and broke the news on his site that morning, just as he had when Gannett laid off workers in August.
Gannett, which does not have a company blog, never issued a press release and does not return Mr. Hopkins’s calls. His posts detailing layoffs at the company and individual papers brought dozens of comments, most of them anonymous, including one from a Gannett employee who said people “might have been blindsided with news of the loss of their jobs had it not been for this blog.”
“I try to give the unvarnished truth,” Mr. Hopkins said. “I don’t think the company offers the same level of candor to employees.” In a plea to get readers to pay for the blog, he wrote, “How else will you learn about your layoff?”
Tara Connell, a spokeswoman for Gannett, said the company thought that “the overwhelming majority of employees” had heard about the layoffs from their local publishers. “We attempt to make those personal communications happen as quickly as possible,” she said.
Unlike more traditional firms, many of today’s Web companies were built on the mission of creating transparency for users. Executives have lived that mission, blogging about company successes. Now that bad times are coming, some of them feel the need to make that public, too. A blog post also comes across as more heartfelt than a press release with canned quotations.
Steven A. Carpenter, chief executive of a two-year-old investing advice site, Cake Financial, had blogged about the company’s new weekly video show and its move to new quarters in San Francisco. On Oct. 19, the night before he laid off 30 percent of his employees, he wrote a post about the cutbacks.
The next morning, he met with the six employees he was letting go. Afterward, he clicked the button to publish his post about the “extremely sad day for all of us who have to say goodbye to a group of great people.”
“Our whole company is built on the idea of transparency in investing, so that was a reason why it was important for us to do it,” Mr. Carpenter said in an interview. He also wanted employees and outsiders to know they were each getting the same version of the story. “It let them know what we were up to in real time, so they didn’t get nervous about what was going on,” he said.
Some founders worry that employees will use their company’s own Web 2.0 technology to turn against the boss. When Loïc Le Meur, founder of the video blogging site Seesmic, laid off one-third of his staff on Oct. 10, the first thing he did was publish a post and video on his company site. Otherwise, he said, videos and posts criticizing him would have shown up all over the Web, including on Seesmic.
“I was not seeking P.R.,” he said. “I just knew I would have bad P.R. otherwise.” His emotional announcement drew 66 comments, almost all of them supportive.
Some companies that have skipped the layoff post have suffered. After Jive Software cut 20 percent of its staff, one of the terminated employees, Chris Kalani, called it an “all out massacre” on his personal blog and said he had been forced to leave behind his things, including his wedding photo. Tech blogs immediately picked up the story.
Jive, of Portland, Ore., was left scrambling to react. Sam Lawrence, the chief marketing officer, left a short message on Twitter: “Folks, Jive did make a cost reduction today. Nowhere near as dramatic as what I’m reading on Twitter and Techcrunch.”
Mr. Kalani updated his blog after the company called and said he could get his possessions. Still, the negative tone had been set. “From your description of events, it’s clear that the positive Jive work environment was the first thing to go,” one commenter wrote on Mr. Kalani’s blog.
Mr. Lawrence said Jive, which has a company blog, did not blog about the layoffs “out of respect for the people involved.”
But Mr. Kalani said he wished Jive had published its own post. “They had to run and clean up the mess, but it was kind of their fault for not writing about it themselves,” he said. “There was no grace or anything.”
Companies that have blogged about their layoffs have found a sympathetic audience. Start-ups with job openings called ex-employees of Cake after Mr. Carpenter blogged about their layoffs. Glenn Kelman, chief executive of real estate site Redfin, expected the public to turn against him after he wrote about Redfin’s layoffs. Instead, 74 readers left supportive comments on the blog. “It’s been part of the healing process,” Mr. Kelman said.
The demand for transparency has forced small start-ups to act like public companies, he said. At the same time, “it makes private companies much more accountable to the people they retain and who leave, and that’s probably a good thing,” Mr. Kelman said.
Larger companies need to learn that lesson, too, said Andy Sernovitz, chief executive of the Blog Council, which helps big companies use social media. “There are hold-out companies that still wish there was traditional P.R. control of the message, but that day is long over.”
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