Reference no: EM13475643

IN the recessions in the early 1990s and after the 2001 terrorist attacks, layoffs were fairly private affairs. News often leaked out to local and national media outlets, but companies did their best to keep it as quiet as possible. Given the growth of the Internet in general and of social networking sites in particular, that's no longer possible. When Starbucks laid off employees in 2008 and 2009, the Web site StarbucksGossip.com received a barrage of posts from disgruntled employees. One 10-year employee wrote, "This Company is going to lose every great partner that it has. I am sick and tired of being blamed for not meeting my budget when the economy is in recession. I used to be proud of my company...now I am embarrassed and feel physically ill every time I have to go to work."

Some companies are taking a proactive approach. When Tesla Motors laid off employees, its CEO Elon Musk posted a blog entry about it just before announcing the layoffs internally. "We had to say something to prevent articles being written that were not accurate," he said.

"Today, whatever you say inside a company will end up in a blog," says RusyRueff, a former executive at PepsiCo. "So you have a choice as a company-you can either be proactive and say, ‘Here's what's going on,' or you can allow someone else to write the store for you."

Illustrating the perils of ignoring the blogosphere, when newspaper giant Gannett announced it was laying off 10 percent of its employees, it posted no blog entries and made no statement. Jim Hopkins, a 20-year veteran who left the company just before the layoffs, writes the unofficial Gannet Blog. "I try to give the unvarnished the truth. I don't think the company offers the same level of candor to employees," he said. Gannett spokeswoman Tara Connell replied, "We attempt to make those personal communications happen as quickly as possible."

Says blog expert Andy Sernovitz, "There are hold-out companies that still wish there was traditional P.R. control of the message, but that day is long over."

Questions:

1. Do you think Tesla CEO Elon Musk did the right think when he blogged about impending layoffs just before announcing them to employees? Why or why not?

2. Do you think employees have responsibility to be careful when they blog about their company? Why or why not?

3. Do you think employees who blog about their companies have an ethical responsibility to disclose their identities?

4. How can a company develop a policy for handling communication of sensitive issues inside, and outside, the company?