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Four Ways CEOs Spin Layoffs So They Don't Get Blamed

PinkSlipsFlickr.jpg NBC Universal plans to reduce its 2009 budget $500 million by cutting travel, promotional expenses and what the Wall Street Journal euphemistically calls "staffing costs." And it should cut costs. After long and accelerating declines, ad spending at local TV stations is down 4.4 percent during 2008's first half.

But despite this good reason to fire people, NBC Universal CEO Jeff Zucker told the Journal the company will cut costs because "we are living in a time of unprecedented economic challenges."

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Blaming the economy is just one of four tricks CEOs use to spin layoffs so no one gets too mad at them. Here are a couple of others who have followed Zucker's lead:

  • Heavy. MBAs took over men's video portal Heavy.com a year ago this fall. Since then, the company has lost two-thirds of its sales force and is now re-launching as yet another ad network. But the new layoffs? Those are because of "the current economic downturn and related uncertainty in its industry," Heavy said.
  • Fast Company. Fast Company publisher Mansueto Ventures just laid off 20 employees from its digital department and rolled the rest into its print operations. CEO John Koten blamed the economy for the cuts, saying they were "our best chance of getting through this rough time." In case blaming the economy didn't work, Koten had a backup plan: keeping the free massages and soda. “I did not cut certain things like sodas and massages because I want to do everything possible to ensure that this to remain a very special place to work," he wrote in a memo.

If you don't want to blame the economy, you can also reach for a couple of other tried-and-true layoff packaging methods, which will also help deflect blame:

  • Say this round of layoffs will prevent the need for any more, ever. Ad network AdBrite fired 40 of its 100 employees this month and CEO Iggy Fanlo said “I made the decision to go very deep, very quickly so we won’t have to do it again.” The move, he said, will help Ad Brite "to get profitable immediately." But will it also put the other 300 or so equally redundant ad networks out of business?
  • Buy a company at the same time. EBay laid off 10 percent of workforce earlier this month. eBay CEO John Donahoe said:  "We are making aggressive moves to strengthen our leadership positions in e-commerce and payments to competitively position our company for long-term growth.The cut came too late and didn't go nearly deep enough, but eBay had another announcement handy to deflect attention.  eBay simultaneously announced $390 million acquisition of two Danish classified sites. A 25 percent staff reduction would have been more "aggressive" -- and actually help eBay battle Amazon and Google in the US.  But then, maybe times aren't quite "unprecendented" enough for a move like that.
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(Photo by My Hobo Soul)

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