Friday, November 7, 2008

Layoffs & PR Strategy

We've seen a growing number of startups announce layoffs as a way to "cut the burn rate" and "extend the runway" -- two terms rarely heard after the dot-com crash.

Call these preemptive layoffs, they are intended to help startups keep enough cash to survive until the end of the economic crisis (which a friend yesterday called the "new normal") when, presumably, there will be more interest in their product or service.

Lawrence Coburn, CEO of RateItAll, a distributed consumer review company, makes an interesting point in a recent blog post: "Layoffs should not be part of your PR strategy."

I totally agree.

On the other hand, the New York Times' Claire Cain Miller wrote an interesting article, "In Era of Blog Sniping, Companies Shoot First," in which she reports that companies need to get aggressive to communicating key messages about layoffs because of blogs and Twitter.

Unfortunately, I totally agree with that, too.

In the end, for the sake of transparency, I do think that companies will now need to acknowledge layoffs -- before the ex-employees do. I think companies now need a communications strategy to deal with the Web 2.0 world when layoffs are planned. But I still feel that companies shouldn't use layoffs as part of their PR/marketing strategy.

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