31 July 2008
Exercise in woeful employee communication at Bennigan's
Employees learn of job losses via notices pinned to locked doors.
Approximately 150 branches of Bennigan's restaurants came to an abrupt end within the US this week, as its Texas-based parent company, Metromedia Restaurants, filed for bankruptcy protection.
This announcement comes 2 months after Bennigan's denied reports that it was going to file for bankruptcy. The filing doesn't affect the 2 other restaurant chains owned by Metromedia: Ponderosa and Bonanza Steakhouse.
Midnight callers
The closures result in the loss of 10,000 jobs. Many restaurant managers reportedly learned of the closures from late-night telephone calls from their senior leaders.
Many restaurant managers reportedly learned of the closures from late-night telephone calls from their senior leaders.
Others arrived to work at company-owned Bennigan's restaurants throughout the country on Tuesday morning, only to be greeted by signs on the front door showing messages such as "WE ARE CLOSED. THANK YOU".
Care for employees?
Yesterday morning, Metromedia's website still contained no information about the closures and calls to the firm contained a voicemail message including only basic information about the bankruptcy filing and details about how to claim refunds on Bennigan's gift cards.
To employees and onlookers it seems the company put more preparation in place regarding the legal and external necessities of the filing, rather than about how to inform its employees of its demise.
Presumably, following this week's events, employees at Metromedia's other restaurant chains could have understandable concerns for the future of their jobs and the manner in which they could be informed of any losses, should any further action need to be taken at the organization.
Explain the future implications
We asked our manager and leader communication expert, Andy Szpekman (pictured, below), president of AHS Communications, for his advice about how to communicate with the remaining employees:
"Following a job-elimination announcement you need to
plan how you'll communicate to remaining staff. Like those whose jobs have
been eliminated, the employees who remain may feel a host of negative
emotions, including shock, anger, resentment, frustration, insecurity,
confusion and sadness.
"To mitigate these reactions," Szpekman says, "it's best to explain to remaining employees the reasons why jobs were eliminated, how exiting staff are being supported and the implications for remaining employees. Also offer opportunities for people to vent their feelings."
Explain why jobs were eliminated, how exiting staff are being supported and the implications for remaining employees.
Set up forum to answer questions
Szpekman's suggestion as to the best strategy to adopt when communicating job losses is to "convey the news face to face."
"During the meeting," he says "you should announce that jobs are being eliminated, answer any questions, thank employees for their contributions and mention any separation benefits."
Of the Bennigan's situation, Szpekman says "If the company had lined up managers to convey the news this way, even via conference calls, it would have gone more smoothly."
Liquidation of assets
The Chapter 7 bankruptcy filing which Metromedia Restaurants actioned on Tuesday this week, means the company seeks to liquidate its assets and shut down.
Locations owned by franchisees, however, weren't part of the filing and won't be shut down, said Larry Briski, president of the Bennigan's Franchise Operator Association.
Final paychecks will never arrive
Bennigan's owner issued only a very brief statement about the bankruptcy fiing on Tuesday. ABC7 News reported that the owner said that it has about 50 creditors and after paying off all of its administrative expenses, it will have no money to pay its creditors.
"So it seems as though those employees who are losing their jobs are likely to go without that final paycheck," said the site.
"Totally unprofessional" shutdown
Meanwhile, CBS2 news carried comments from Alphonso Prince, manager of a Bennigan's in Calumet City. He said that there was "No blast of e-mails, nothing to say, 'Sorry, we just can't do it anymore, just a phone call from my area director who doesn't know anything, because she just found out. She'd been with the company for 21 years."This development is likely to signal job cuts at other restaurants.
Prince told CBS2 the Bennigan's shutdown was "totally unprofessional."
A sign of the times
This development is likely to signal job cuts at other restaurants. Earlier this month, Starbucks announced mass store closures and the elimination of 12,000 jobs.Qantas airline also fell victim to a leaked memo, which announced that 1,500 jobs were to go at the company.
Financial experts also predict further major job losses worldwide as a result of the economic downturn.
Have your say
What would you have done differently if you had the task of communicating the mass closures to affected employees and the media? How would you allay the potential job fears of Metromedia Restaurants' employees at Ponderosa and Bonanza Steakhouse?Recommended resources:
Communicating during economic downturn: Melcrum reportGot a news story? Contact the newsdesk