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The workers are the last to know

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Declan Curry | 19:16 UK time, Friday, 30 October 2009

I was doing my second job - broadcasting business reports on Radio 5 live's tea-time programme - when news came through that the company behind Threshers and Wine Rack was going into administration.

It will now be run by specialist accountants, who will keep it going until they break it up, sell it on or shut it down.

The news wasn't unexpected if you follow the business pages. Only last Tuesday, the Financial Times newspaper reported Threshers' owners were on the brink of collapse.

We also had been checking in with the company; in fact, its spokespeople at the posh City PR firm Brunswick told us it was not going into administration just half an hour before the announcement that the men with sharp pencils would be arriving after all.

But it seems to have come as a bit of a shock to its own workers.

I got a call last night from one store manager, who told me the first he knew he might end up shutting his shop and losing his job was when he heard it from me over his in-store radio.

I'm sorry he had to hear about it like that. And I'm not sure why he had to.

Companies are often criticised for announcing big job cuts through the media, usually at 7am. It means many of the workers affected by this news hear about it first from radio or TV over their breakfast.

That cannot be a good feeling. But there's a reason it happens so often.

Publicly-owned companies - owned by lots of shareholders - have to tell their investors about major news at the same time. If only a few investors know an inside secret, it could create what's called a false market in their shares.

To be on the safe side, companies with shares on the stock market make these announcements through official channels before the stock market opens for business at 8am. The custom has grown to announce big news - including job cuts - between 7am and 8am.

Companies with good antennae know their own workers feel under-valued by this - and that it plays badly with unions and local media. So we're seeing more cases of companies calling works meetings to break the bad news, also for 7am.

But that's for companies with shares trading on the stock market.

Thresher is owned by a firm called First Quench. It is privately owned, not publicly traded.

I can't see why it could not have told its own workers about its plans at the same time as any public statement.

It doesn't make the news any less distressing to my man behind the counter.

But it would suggest he's regarded as more than just a line in an administrator's spreadsheet.


  • Comment number 1.

    If they weren't engaging with their people on the way down, why would we expect them to do it on the way out. I agree that it's a sad state of affairs when staff end up as just another creditor for the administrator to sort out. But when a business in administration is attempting to market itself as a going concern, isn't in it's own self interest to communicate effectively with those people who are still trying to keep it going?

  • Comment number 2.

    Borrowing money to buy instruments!

    What a silly scheme. So parents will be getting instruments for their children they can't afford and having to pay it back for years?
    A basic guitar £20-£50, basic keyboard velocity sensitive £99, etc etc
    and lessons? £20+ for 30mins?!!!!

    Come on, if you cant afford the instrument you cant afford the lessons can you?!

    I would have loved to learn an instrument, but at my school you needed parents to buy the instrument and pay for extra lessons before the school provided time. My parents would not have paid £10 in the 70's for a guitar, which to be honest is a bit mean. But then they were on benefits and it would have been absolutely bonkers to borrow money for an instrument and have the debt.

  • Comment number 3.

    But surely you know Declan and why the PR company said what it. The reasons are credit insurance (recall Woolworths,) suppliers/creditor action, and probably attempts to arrange a 'prepack' which govern the need for confidentiality. Incidentally Threshers own more than booze shops.

  • Comment number 4.

    Although it would be terible for anyone to hear about their job loss over the news, I think companies also have to consider morale in the workplace; if you tell the workers in advance that they might be losing their jobs they cannot take their job enthusiastically.


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