E-mail Blunder Alerts Carat Staff to Major Restructuring

Top HR Exec Accidentally Sends Out Talking Points About Upcoming Job Cuts

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NEW YORK (AdAge.com) -- Struggling media agency Carat is planning a major restructuring of its U.S. operations, including an undetermined number of layoffs -- news it accidentally released today via a memo the agency's top New York-based HR executive e-mailed to the entire agency that appeared to be intended only for senior managers.
Read the Documents:
Carat Restructuring Communication Plan

In a rare, uncomfortable look into the preparations for employee layoffs, management informed its rank and file of forthcoming layoffs and other changes in Microsoft PowerPoint and Word documents full of "message" points on how people should be told of their fate and what should be said to their still-employed colleagues, clients and vendors. According to one person with knowledge of the memo, it was sent to all staffers before the mistake was realized, and it was pulled back by the IT department. The documents, obtained by Advertising Age and posted with this story, detail talking points for managers as they talk to clients, vendors, the press and employees as Carat tries to navigate the fallout from the news.

In an interview, Carat President Scott Sorokin depicted the forthcoming moves as being in the best interest of the clients and as a response to "client needs." He said that the layoffs would be across various parts of the agency, not just the buying groups, which figure heavily in the documents. He said that that emphasis is because those groups are spread across various satellite offices.

Neither he nor a spokeswoman would comment on whether any disciplinary action would be taken as a result of the e-mail mishap.

Scope of layoffs unclear
Carat's parent company, Aegis Group, indicated last week that layoffs were coming, though it hasn't revealed the scope of the terminations. While the documents don't detail how many employees will be laid off, they do say the agency plans to consolidate its buying team in New York and that the changes will be announced later this month. Repeatedly describing the moves as a "right-sizing" of the agency, the documents also indicate that offices including Boston, Chicago, Dallas, Los Angeles and San Francisco are affected, and that the changes are a response to the loss of key pieces of business and reduction in client spending. Carat has recently lost accounts such as Hyundai and New Line Cinema.

As you would expect, the documents contain a lot of corporate-speak about the future.

The e-mail was sent to the agency by Chief People Officer Rose Zory. It had been forwarded to her by Senior VP Rob Hollander, who added notes to it, with Mr. Sorokin copied.

Included was a script for how the downsized would be informed: "If you would like to go home today and come back tomorrow to clean out your desk or office, you are free to do so. We would like you to meet with your manager following our meeting to transition your work. We will be communicating to your team today. Your manager will be contacting clients. We ask that you do not contact your clients to discuss this situation."

'Critical talent'
There was also messaging for remaining "critical talent," asking those executives to talk up the company to their colleagues who are "questioning if this is the right place for them to build their careers."

"Let them know we are building for the future," it read. "The actions we had to take, although unfortunate, were necessary to right-size the company and ... bring in the skill sets we need to effectively service our business and future client needs."

The message for Carat clients: "Mary Smith will be moving off your business. Now that we understand your business better, we are replacing her with someone whom we feel will be a better partner for you." The document offered an alternative for times when the "staffing change" affected a longer-standing relationship with the client: "Mary Smith will not (sic) longer be working on your business. In order to serve you better and provide greater innovation we have made a staffing change to your business."

One note from Mr. Hollander reflected on the company's PR plans around the layoffs. He wrote, "This is a tough one. Since we're not opting to get out in front of the press, we will be left to defend. I think we may need to prepare for different contingencies depending on how they may hit us -- because they will hit us. RISK assessment."

Owning up to the error
John Hollon, editor of Ad Age sibling publication Workforce Management, said he had never heard of this kind of mistake before. "It's seems to me the issue here is one of a dumb, stupid error that just about everyone who uses e-mail does from time to time," Mr. Hollon said. "You would think that the chief people officer would be more careful given their position in the company -- a reasonable assumption to make -- but that's not always the case. Owning up to the problem, apologizing and emphasizing it was a terrible mistake won't solve this or make it better but can go a long way toward getting beyond it quickly.

"Still," Mr. Hollon added, "if I were the CEO, I might want to start looking for a new chief people officer. You pay those people to step up in these situations, not make it worse."

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