"Der Diskrete Jobkiller": Novartis CEO's Secret Layoffs Show How Not to Do It
Novartis (NVS) CEO Joe Jimenez's strategy of not talking about layoffs -- while laying off thousands -- seems to be backfiring. A Swiss newspaper called him "Der diskrete Jobkiller" after doing some detective work that found he's laid off 2,500 people -- 500 more than the previous estimate of 2,000-plus, which itself was the result of detective work by reporters covering the pharma business and not Novartis' own disclosures.
The Swiss report noted 500 layoffs at a site in England, in addition to a reduction of the U.S. salesforce by 1,400, and 600 other jobs at various Novartis locations. Novartis only confirmed that there will be "downsizing" in its future to BNET on Sept. 19 even though they've been going on for more than a year.
It's a classic example of how not to handle bad news at the corporate level. Almost always, experts say, a company's best bet is to release bad news all at once, giving the public as much information as possible. This allows the company to "get ahead" of the story by driving it rather than being forced to react when someone else inevitably leaks the news. The company takes a one-time hit in the headlines, but can then put the issue behind it.
Don't tell, don't ask
The opposite is happening at Novartis. With so little official information from the company about whose jobs are at stake, the media pounces every time something new comes out, repeatedly bruising Novartis' reputation. This morning, for instance, City A.M. reports that "sources" in Switzerland say the company "will make sweeping job cuts at sites across the world in a bid to keep a cap on costs." No specifics were given.
It's probably hurting morale inside the company, too. Readership traffic for stories about layoffs at Novartis is above average at BNET, which is normally an indicator that employees are turning to exterior sources to find out what's going on.
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