Paradigm Reversal: Relief Fund and Extended Insurance for Laid Off Staff, CEO Sam Gores to Forgo Salary

Company has secured “interim financing that will provide a bridge through this global crisis,” Gores says in email

Last Updated: April 7, 2020 @ 7:40 AM

Paradigm CEO Sam Gores on Monday expressed regret to staffers laid off due to the coronavirus pandemic for what he said was initial communication about the move that “lacked compassion,” and announced new measures to help furloughed employees.

“The vital and significant actions we took, though necessary for the health of the company, were hard and painful,” said in an email to staffers at the agency. “And while immediate action was required, I realize that the way the message was conveyed to you lacked compassion and made you feel alienated from Paradigm.”

Paradigm let 250 staff members go on March 20 and enacted pay cuts for remaining employees. The company’s movie, TV and music departments were particularly hard hit. Laid off staffers later harshly criticized the company and Gores for how the layoffs were handled, telling the L.A. Times that they received no severance pay and were told their insurance would be cut off April 1, among other things.

In response to the backlash, Paradigm has now established a $1.1 million relief fund for affected employees, Gores said in the email, with details to come no later than Friday. In addition, health insurance for those employees has been extended through the end of June, along with the promise that the company “will continue to monitor the situation closely.”

Furthermore, Gores said that the company still considers the layoffs a temporary measure, and “our intention is to bring as many of you back as possible.” Gores said also that the company will help laid off employees maintain their lists of clients and accounts.

In addition, Gores said that Paradigm has secured “interim financing” to get it through the current crisis, and that he will forgo his full salary for the rest of 2020 as an additional cost-saving measure.

Gores’ letter comes four days after former Paradigm agent Debbee Klein filed a $2 million lawsuit against Paradigm and Gores himself, alleging breach of oral contract and whistleblower retaliation, tax evasion and improper use of company funds, among other things. Gores and Paradigm have strongly denied the accusations, calling them “false, frivolous and scurrilous.”

Read the full letter below:

Dear Colleagues,

I am committed to improving our flow of communication as we weather this uncertain time. The difficult and urgent actions we took on March 20th were the hardest of my 37-year career. Paradigm’s great strength is its enormously talented staff. It always has been and always will be. The vital and significant actions we took, though necessary for the health of the company, were hard and painful. And while immediate action was required, I realize that the way the message was conveyed to you lacked compassion and made you feel alienated from Paradigm.

You are part of this team because we believe in your talent, and we hope that you will be the people who will help build Paradigm’s future after the COVID crisis. From the beginning, we have considered these layoffs temporary and it bears repeating that our intention is to bring as many of you back as possible.

Over the past weeks, we have been working to mitigate the effects of these temporary layoffs and provide extended benefits, comfort, and assistance as we prepare for this pandemic to end and go back to work as a community at the agency I’m proud to call my home.

• Paradigm has established a $1.1M Employee Relief Fund to provide additional support of our temporarily laid off employees. We will have further details regarding this fund on or before Friday, April 10.

• Your health care coverage has been extended through the end of June and we will continue to monitor the situation closely.

• Our intention is to support you as a member of the Paradigm family. Our desire is to help our teams and help you maintain your books of business. If you have any questions regarding the structure that has been put in place to support agents and their team members who have been temporarily laid off, please contact your office leader or department head.

The coronavirus has affected almost every business in the world and certainly our industry. When months of film and television productions, concerts, tours, and festivals were cancelled or postponed overnight, every aspect of our business was dramatically impacted. I thought you’d like to know about several actions Paradigm has taken to ensure that the company remains on solid ground.

• Paradigm has secured interim financing that will provide a bridge through this global crisis.

• Paradigm has signed a new franchise agreement with the Writers Guild of America, allowing the agency to resume representation of its WGA-represented film and TV writer clients. Paradigm is the first major talent agency engaged in television packaging to sign a new franchise agreement with the WGA. This is a huge step forward in a situation that stretches back almost two years. In signing the agreement, it enables our literary agents to re-sign our writer clients and get them back to work.

• I have forgone my salary for the remainder of 2020, and beyond if necessary.

• Like all other agencies industry wide, staff above Coordinator level are working at reduced
wages until business picks up again.

I am deeply sorry about the financial impact this crisis has had on so many of our colleagues, friends, and families as we confront one of the most urgent health and economic challenges of the modern era.

I’ll contact you again on or before Friday with more information about the Employee Relief Fund. Stay safe, stay well, and we’ll continue to be in touch and keep you informed regarding our efforts on your behalf.

Warmly and with great respect,

Sam Gores, Chairman & CEO

Deadline first reported the announcement.

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