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Chicago-based PR firm Edelman to lay off 390 employees due to COVID-19 losses

Richard Edelman, president and CEO of Edelman, during a Q&A at the Hyatt Regency McCormick Place in Chicago on Tuesday, Feb. 7, 2017.

Richard Edelman, president and CEO of Edelman, during a Q&A at the Hyatt Regency McCormick Place in Chicago on Tuesday, Feb. 7, 2017. (Jose M. Osorio/Chicago Tribune)

Edelman, the world’s largest public relations firm, is laying off 390 people, or about 7% of its workforce, due to revenue declines during the COVID-19 pandemic.

The firm, which is co-headquartered in Chicago and New York, declined to disclose Wednesday how many people in the Chicago office would lose their jobs. Edelman, which has about 5,700 employees worldwide, will also reduce salaries from 5% to 20% for those not affected by the layoffs.

Richard Edelman, president and CEO of the PR firm started by his father in Chicago nearly 70 years ago, sent employees an email Tuesday explaining the decision — a reversal of an earlier pledge to avoid layoffs during the pandemic.

“This decision is gut wrenching, especially as I told you in March that we would have no job losses due to the pandemic,” Edelman said in his memo. “Despite all efforts, we are beyond the threshold of loss-making and to ensure the long-term health of our business, I must change course."

Edelman cited “a succession of body blows” to the business, with travel, hospitality, automotive and airline clients facing “historic declines in demand.” Declining oil prices brought “massive cuts” in the firm’s energy business, he said.

When profits turned to losses — despite a number of cost-savings measures, including a 15% to 20% reduction in top executive pay — the firm was “no longer able to sustain” its business without layoffs, Edelman said in the memo.

Employees affected by the layoffs were notified beginning Tuesday. In addition to severance, each will receive career transition services, employee assistance programming including “emotional support” and a $1,000 credit toward personal technology such as a laptop.

Edelman generated $892 million in revenue last year, the company said. The privately held firm was founded in Chicago in 1952 by Dan Edelman, considered by many to be the father of modern public relations.

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