Comms lessons from the Hudson’s Bay shutdown

A look at what internal comms pros can do when a business ceases operations.

One of Canada’s most recognizable retail stores is going the way of the dodo as Hudson’s Bay lays off its entire staff over the coming weeks, with around 10% of employees remaining on board through midsummer to oversee the final shutdown of the brand. The department store chain, which originated in 1670, announced earlier this week that over 8,000 employees would be terminated by June 1.

According to the Toronto Star, the move comes after unsuccessful efforts to find a buyer to keep the chain of department stores alive. Canadian Tire is slated to take over Hudson’s Bay’s intellectual property post-shutdown.

Beyond the loss of jobs, there are other major impacts on Hudson’s Bay employees. The company is not offering severance packages to affected employees, and benefits such as healthcare, post-retirement pensions, and long-term disability have been significantly reduced or eliminated.

Although it’s something no internal communicator wants to think about, knowing how to navigate a brand shutdown is an important skill for comms pros to have at the ready. The task lies at the cross-section of crisis and change comms and proper execution can go a long way toward maintaining relationships.

Montieth Illingworth, CEO of Montieth & Company (and Canadian), told Ragan that Hudson’s Bay’s legacy needs to factor into how communicators talk about the shutdown.

“The big thing that everyone is going to remember in the long run is how it was handled at the very end,” he said.

Tips for communicating shutdowns and job cuts

While the Toronto Star report didn’t dive into exactly how news was broken to Hudson’s Bay’s employees, there are certainly some tenets that internal comms pros should heed when relaying news of a mass layoff.

In a piece for Ragan last fall, Tommia Hayes, digital communication specialist at the United States Department of Education, outlined a few major ways that comms pros can handle layoff announcements.

• Lead with compassion and ask what’s needed. Layoff announcements, let alone the shutdown of a nationally recognized brand, can pose a major challenge for communicators and leaders. Centering announcement messages with compassionate language and understanding from leadership (who in this case, is also dealing with job loss) can help soften the blow a bit. This is also true for the thousand or so employees
• Framing matters. Within chaos often lies opportunity. For some laid-off employees, the shutdown might provide an avenue to pursue personal goals or other lines of work. While it’s important to communicate with empathy for those who are losing their jobs, communicators can frame conversations around the fact that there’s still a road ahead for affected employees. A great example of this in action is found in Spotify’s 2023 round of layoffs, in which the company communicated the details thoroughly and even offered to help with the job search for impacted employees. “Even though they’re hard, layoffs can help us pivot into positions that get us into the roles that are better fits or more desirable,” Hayes said.

The legacy beyond the shutdown

While it might seem like announcing a shutdown is a final act for an internal communicator, that’s not always necessarily the case. In the case of Hudson’s Bay, the purchase of the intellectual property by Canadian Tire means that the employer’s reputation is still at stake during internal shutdown conversations.

Illingworth said that companies in Hudson’s Bay’s situation need to carefully consider the company’s legacy during the shutdown. He suggested that the company should handle every piece of internal communication from the role of a helper, whether that’s in pointing out new career directions for employees or reaching out to individual groups of employees impacted by the shutdown to provide support.

He added that despite the fact that nearly 10,000 employees will lose their jobs this year in Hudson’s Bay’s liquidation, communicators can’t handle it with one brushstroke. He emphasized the need for proactive communication throughout the process, whether that’s setting up update calls leading up to the termination date or standing meetings in which employees can learn relevant information to help them transition beyond the company.

“You have to communicate with the affected employees based on the specific needs they may have,” he said. “When you’ve got that many employees, you can’t treat them as a monolith in any situation, especially this one. That can require thinking outside the box in how you talk about it rather than just cutting people loose.”

Sean Devlin is an editor at Ragan Communications. In his spare time he enjoys Philly sports and hosting trivia.

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