UPDATE: Insiders at Global Road said that the actual numbers in that first round of layoffs reached only 45, with another five in the U.K. While there is no severance, insiders said that management bucked the draconian instructions from the lenders that took over the company, and got those laid off two months of COBRA insurance, which at least cushions the devastating blow of losing pay that day. I wonder if the number had to do with the California WARN Act, which requires 60 days notice before a mass layoff which constitutes 50 or more over 30 days. I’ve heard that some staff have said they are likely to be on for 30 days, so the whole strategy might be to escape legal liability.
EXCLUSIVE UPDATE, 11:30 AM: We understand that at least 60 U.S. Global Road staffers are to be let go in addition to at least five in the UK. That’s around half the total workforce. The culls come from domestic theatrical, production and distribution. Many workers have been told this is their last week, and none are due to get severance pay. Some are even being told today is their last day.
Key senior execs are being kept on to steer what remains of the ship, but the abruptness of the move has left many angered and at a loss.
“It’s f*cked up,” one departing employee told us. “They know they are breaking laws by not offering any severance or consultation. I don’t even have a termination letter. It’s not clear why some have been let go and others kept on. My colleagues and I are discussing possible next steps. Those at the top need to take responsibility for this. It’s not only on Donald Tang, [CEO] Rob Friedman has to take his lumps too. Many of the staff have families to feed and trusted these guys. This should have been foreseen or handled differently.”
It’s still early in Los Angeles, but sources said that a number of employees are already putting together a class action claim against Tang Media Partners, under the California WARN Act. That requires companies to provide 60 days notice before a mass layoff, which constitutes 50 or more people over a 30-day period. So this is going to get uglier as it moves along.
Some are saying that Tang has been nowhere to be found and the whole thing is as impersonal as it is abrupt. Unless Global Road reconsiders and provides a little largesse, the lack of severance, which is cataclysmic to employees with families, makes this more draconian than layoffs made by the other recent Hollywood bankruptcies, Relativity and The Weinstein Company. Just before Lantern Capital legally took possession and pulled it out of bankruptcy, TWC abruptly sacked north of 20 staffers. That happened on a Wednesday in July and the pay spigot shut off two days later, with insurance ending two weeks after that. That seemed harsh at the time, but from what we’re hearing this is Dickensian by comparison and sets a terrible precedent. Stay tuned.
No comment from Global Road. We’ll update when we have more.
PREVIOUS EXCLUSIVE, 9:50 AM: The layoffs at Global Road has begun in the UK. Trying to get a fix on how many have been laid off, but those who are getting sacked will get zero severance. That was mandated by the banks that took over last week and that are trying to stanch the bleeding exacerbated by last weekend’s tanking of A.X.L. It is expected to get worse today on these shores, and sources expect clarity on a looming Chapter 11 filing. Stay tuned.