When Paradigm Talent Agency CEO Sam Gores laid off a significant portion of his staff last Friday, he said it was meant to be temporary and that he hoped to hire those people back no more than six months later.
"Reconciling who we are as a company with this brutal moment in time is nearly impossible," Gores said in a note to employees, citing the widespread negative effects the coronavirus has had on the entertainment industry. "We have always endeavored to put our people first, so to conduct layoffs at any level honestly leaves me gutted."
But staffers who were let go present a different story, saying the Beverly Hills-based agency misled the public and clients about the size of layoffs — the company disclosed Thursday 250 were affected, more than double the number initially reported — and has been callous over its handling of the job cuts.
"It's the level of dishonesty with how they are handling things that's really the most upsetting thing," said a former Paradigm employee who was let go and who declined to be named for fear of retribution.
Former laid-off staffers also complained they did not receive any severance and that they were told by management they would get health insurance paid only through April, even though their jobs could be on hold for up to six months.
Some employees also were upset over a letter they received from the company stating that if they wanted to access their email during the layoff period, they would have to sign a document agreeing not to sue the company over compensation.
"There is no help," the former employee said. "They are acting like they are trying to take care of us the best they can, and it's absolutely false."
On Thursday, Gores said he was addressing some of the former staffers' concerns. He said Paradigm would extend health insurance for laid-off employees through at least the end of June. He said those employees did not receive severance because they were not fired and the company hopes to hire them back.
"We saw it as a very, very serious threat to our business, and so we felt like we really had to make some decisive moves," Gores said of the pandemic. "The truth, is, I’m so very, very sorry to see so many of my people be affected."
Gores said there was no intent to mislead over the size of the layoffs, saying the initial figure released was premature. People close to the company initially said more than 100 people were laid off. Billboard first reported that the layoffs exceeded 200 people.
"In hindsight, we probably should not have let the media talk about a number until we really knew what it was," Gores said.
Some employees were told in a letter from a human resources executive that Paradigm would be suspending their compensation, citing a force majeure provision on their employment agreements with Paradigm.
"The Covid-19 pandemic has materially hampered and interrupted our business and is beyond our control or anything that our industry has experienced in the past," wrote Jefferson Rogers, Paradigm's vice president of human resources in a note to former employees that was obtained by The Times. "As a result, Paradigm is facing extreme difficulty, expense and loss."
Gores said he hopes to hire back laid-off employees soon (he said about 30 were asked to come back this week) and that he is open to releasing agents from their contracts if they get offers elsewhere.
"We’re not going to like draw some legal line or something like that," Gores said. "This is a time of unfortunate international disaster."
Gores agreed that asking laid-off employees to sign a "hold harmless"
letter as a condition to access their work emails was excessive.
Paradigm has been an acquisition target for larger agencies. Last year, Beverly Hills-based United Talent Agency attempted to buy the company, only for talks to fizzle. Century City-based Creative Artists Agency had engaged in exploratory discussions with Paradigm earlier this year, but Gores said his agency was not for sale.
The departures from Paradigm began around the end of last year. A half a dozen people from the agency left for a variety of reasons including attrition, according to a person close to Paradigm. Then, around mid-January, Paradigm said it would lay off 30 people, including music agents.
Friday's layoffs seemed inevitable to several people in the industry, as agencies, including Paradigm, are adapting to shifts in the entertainment industry.
The rise in streaming is changing the way profits are distributed. In addition, talent agencies have had a long-running dispute with the Writers Guild of America over longstanding industry practices, prompting thousands of writers to fire their agents last year.
WGA members are allowed to work only with agencies that have signed separate agreements with the WGA. Paradigm was among the holdouts until Monday, when it reached a deal with the union.
In addition to the layoffs, Paradigm has also recently implemented salary reductions across the company, with some employees, including agents, taking a 50% pay cut. Gores said he will forgo his salary until at least the end of the year.
Some former workers are wondering how they'll make ends meet. One employee laid off on Friday said half his monthly pay check goes toward paying $1,100 for his monthly rent and utilities. He worries that his savings will dry up by the end of summer.
"We’re all just trying to figure out the best way to pay our bills and hope that there is a rent freeze," said the former employee, who declined to be named. "Right now we have to keep our heads afloat."
Paradigm is not the only agency that has been cutting cost in the wake of COVID-19 crisis. This week, Beverly Hills entertainment company Endeavor said it would lay off 250 employees, and UTA said it would institute company-wide salary reductions.