On Friday, the agency dismissed more than 200 staff members just one week into the widespread COVID-19 quarantine.
As details of Paradigm’s temporary layoffs of agents, assistants and float staff on Friday have dripped out, anger over the cuts’ timing — just one week into the widespread coronavirus quarantine — and the terms some agents were forced to accept is heating up.
“In times like these you find out who has loyalty,” said Jarred Arfa, Artist Group International GM. “What’s the point of being in a company if you don’t have job security in times of crisis?”
Paradigm is home to superstar artists including Shawn Mendes, Ed Sheeran, Billie Eilish and Coldplay and has spent significant money on acquisitions in recent years. In 2019, the company took full control of European agency Coda and bought Tom Windish‘s eponymous agency in 2017, along with Paul Morris‘ AM Only that same year and Marty Diamond‘s Little Big Man.
On Friday, chief executive Sam Gores told staffers on an agency-wide call that temporary layoffs would be enacted in the coming days. Sources estimate that more than 200 agents, assistants and staffers would be cut as the live events business feels the impact of the spread of coronavirus.
Laid off employees were not given any severance payouts, were told their clients would remain with the agency and weren’t paid outstanding commissions, sources tell Billboard — although many of the agents at Paradigm operate on salaries and not commissions. Paradigm also laid off contract employees and suggested a force majeure clause allowed for termination. Several sources tell Billboard that the force majeure provision requires a 90-day notice, indicating legal action for breach of contract is likely. Staff that remained at the company was required to take a pay cut.
Even worse, many agents were told their non-competes were still in place and they would not be allowed to take their artists with them, even if they signed them and brought them to the agency. Several sources tell people Billboard they doubt the artist provision is enforceable and was done to ensure the agencies were paid outstanding commissions.
“This isn’t about protecting cash flow, this was about protecting profits,” said one former employee who did not want to share their name. “This is really just greed.”
The move stands in contrast to how UTA is handling the financial crisis created by the spreading COVID-19 pandemic. There, CEO Jeremy Zimmer and co-presidents David Kramer and Jay Sures will forgo the remainder of their 2020 salaries from now through the end of the year and the rest of the staff will see proportionate reductions to its pay, with higher earners taking larger cuts in order to avoid layoffs.
“Like companies across the industry and our country, UTA is taking some immediate and painful steps to ensure we get through the current public health and economic crisis as strong as possible,” the agency said Monday in a statement. “In addition to aggressive cost-cutting measures, this includes asking our colleagues at every level to take pay reductions, structured so our most senior colleagues make the largest financial sacrifice.”
UTA was in talks to merge with Paradigm last year but ultimately the deal never materialized.
Billboard reached out to Paradigm for comment for this story but did not receive a response. Previous reporting by The Hollywood Reporter indicated that after the crisis subsides and as business picks up again, Paradigm hopes to rehire the employees it has dismissed and will continue offering them health insurance through May.