The Scoop: Edelman cuts 5% of workforce

Edelman is laying off 330 staff members, or over 5% of its workforce, as part of a global restructuring effort. The global PR agency also plans to sunset several of its subsidiary boutique agencies.

As part of its company announcement, CEO Richard Edelman issued a statement to the company (and the broader industry) providing context about the “simplification of our firm’s structure.”

“Clients now require integration of specialist services into the larger firm for speedy access to our geographic reach, deep industry knowledge and creative ability,” the statement reads. “We are best when we bring the full force of Edelman to the complex problems facing our clients. Corporate affairs, marketing and government affairs are now all closely aligned on the client side. We are skating to where the puck will be — everything is interconnected now.”

As part of a restructuring, Edelman will shutter Edible, Revere, Salutem, Mustache, EGA and Delta brands. However, it plans to keep open three of its specialty arms: Edelman Smithfield (financial communications), DXI (research) and UEG (experiential marketing). Those boutique firms will serve as the “connective tissue” between Edelman and the related Zeno Group and RUTH. The agency will also maintain two client-specific entities — Assembly for Microsoft and Kinisi for J&J.

Edelman plans to keep open its 60 global offices.

Why it matters: Edelman is one of the biggest players in the PR game, and if it’s making a move, it’s important for the entire industry to take note. In this context, that appears to be moving – or “skating,” as Richard Edelman described it – toward a more integrated model. As Axios reported, Edelman is working “to take money away from classic marketing agencies and compete for budgets that [they] couldn’t have before.” 

But the changes are also about becoming more “nimble and agile.” While still a $1 billion revenue business, Edelman saw its revenue drop by about 8% last year – and further efficiency would likely help change that trend.

It’s not clear if the growth of artificial intelligence is part of that changing model or the cuts in staff. But Edelman has emphasized its commitment to investing in its own AI technology.

“We are investing in our own large language model premised on 25 years of Trust data that enables AI as a predictive tool, both communications and action, enabling better decisions by business related to trust,” Richard Edelman said.

Following the downsizing, he told Axios positions affected by the downsizing “about evenly split” between “vice president and up” and “account executive to account supervisor.” But he also stressed in his company statement to deliver on client needs “with senior people leading every engagement.” That suggests the Edelman team really wants to use in-house staff time on strategy when and where possible. 

To that end, Edelman has hired over 200 creative employees in Colombia and plans to staff up in India and South Africa, per Axios.

Keep an eye on next steps for Edelman, as it could be a strong sign of what’s in store for the industry.

Editor’s Top News

• UnitedHealthcare’s CEO, Brian Thompson, died on Wednesday morning after being shot during an apparent targeted attack at a New York City hotel. He was in midtown Manhattan to attend his company’s annual investor conference. Following the incident, UnitedHealth Group, the parent company, abruptly ended the scheduled conference, citing “a very serious medical situation with one of our team members,” per CNN. Soon after the news broke, UnitedHealth Group issued a statement to offer support. “We are deeply saddened and shocked at the passing of our dear friend and colleague Brian Thompson, the CEO of UnitedHealthcare. Brian was a highly respected colleague and friend to all who worked with him.  We are working closely with the New York Police Department and ask for your patience and understanding during this difficult time. Our hearts go out to Brian’s family and all who were close to him.”  The death of any employee is a major shakeup for any company and can take time to process. But one as prominent and visible as this one merits an immediate response. Even though information is still developing and they didn’t have much news to add, the UnitedHealthcare comms team wisely used its response to share its concern for Thompson’s personal and corporate families, while also directing questions related to the incident to the NYPD. Our thoughts go out to the Thompson family and all those affected by this incident.
• IHOP offered a former employee her job back after a Florida chain fired her for giving a homeless person a free stack of pancakes and a cup of water. Victoria Hughes, who’d worked at the IHOP in Lakeland, Florida, for 13 years, told WFLA-TV that her manager became “upset” over her actions. Hughes said there was a fear it cause “a loitering issue…or a safety issue for customers.” After speaking with WFLA and the content going viral on social media – with some users on Reddit, X and Facebook siding with corporate and others siding with Hughes and attacking the company for its actions, especially around the holidays. As one X user pointed out, this was a potential “good will” story IHOP could have used to build its brand. Instead, it quickly turned into what another user called a “PR nightmare.” In situations like the one in Florida, there’s a temptation to stay quiet and hope the problem goes away. But this approach can lead to a knee-jerk reaction that completely misses the mark tone and temperament. The best approach is to confront the situation directly and try to repair any damage done. In IHOP’s, case, the corporate office called Hughes and offered her an unspecified job and compensation for the days of work she missed. Dan Enea, CEO of the company that owns the franchise, Sunshine Restaurant Partners, issued the following statement:“We are committed to providing an inclusive environment, welcome to everyone. As we actively investigate this situation, we will utilize this as an opportunity to train our employees on how to approach instances surrounding food insecurity. To continue our commitment to supporting those in need in our local community, we are making a donation to Feeding America as well as local Lakeland charities that support food insecurity.” While the story and aggregated versions of it continue to circulate online, the pace has slowed down. Comment sections now have positive comments about IHOP’s response peppered in as well. “nice, glad they offered her job back, with back pay and an offer to donate to a local charity,” one user wrote. “It’s just sad that this situation had to escalate so quickly to her losing her job.”

• A newly released survey from the Pew Research Center suggests the overwhelming majority of American adults believe mainstream news coverage has a bias when discussing political or social issues. The September survey, which published Monday, found that 77% of U.S. adults believe news organizations tend to go either left or right when presenting on those topics. That number represents about nine-in-ten Republicans (88%), compared with 67% of Democrats. Far fewer (22%) believe news organizations deal fairly with all sides. The poll is near the highest share of Americans who say so since it started in 1985. In an era where people are increasingly turning to social media influencers and podcasts over traditional news, this poses a challenge for traditional earned media. Trust is key, and if a team can’t trust the reporter or their perspective on a particular subject, it won’t resonate with target audiences as it should. This doesn’t mean you should give up on your earned media strategy entirely. But now, as much as ever, PR teams must thoroughly vet the reporters and publications and closely examine sentiment scores.

Casey Weldon is a reporter for PR Daily. Follow him on LinkedIn.