Law firm Reed Smith mandates four-day work week in cost-cutting move
Global law firm Reed Smith announced this week that it will lay off and furlough employees, trim workweeks and cut salaries, including moving to a four-day work week to cut costs, citing “prolonged economic uncertainty” from the coronavirus pandemic, Bloomberg Law reports.
The firm’s owners will bear “the largest share” of the financial pain, said Sandy Thomas, Reed Smith managing partner, in a statement.
Thomas’ statement said most of the firm’s professional assistants and “select professional staff” will move to a four-day work week and will see compensation reductions.
Before the pandemic, many companies with a four-day work week saw it as a way to improve work-life balance, and increase happiness and productivity, rather than a cost-saving method. While just 15% of employers currently offer this schedule, according to the Society for Human Resource Management, the rise of flexible and remote working arrangement as well as advancements in technology and automation are pushing the idea toward becoming reality for more workers — especially as companies look at how to return to work safely in the wake of the coronavirus pandemic.
“With all the tools that we have available for people to work more remotely, employees can lean on technology if they're working from home or if they take one additional day off,” says Ryan Gatto, district president for Robert Half, an employee staffing agency.
Gatto says employees have been able to prove that they can be “just as productive” in a condensed week because people are looking to have a healthy balance between their professional and personal life.
Companies across the world are scrambling to rethink their work culture in light of the economic devastation of the pandemic. Twitter, Facebook and Shopify have all announced they will be working from home indefinitely. Facebook said it will be adjusting salaries depending on where employees live, by paying less to remote workers in cities where the cost of living is lower.
Reed Smith’s move to a shortened work week will reduce the salaries of professional staff who earn more than $100,000 annually by nearly 6% on an annualized basis, Thomas said. In London, which is Reed Smith’s largest office, the firm is starting a “targeted redundancy process” that will impact “a small number” of lawyers and staff, Bloomberg Law reports.
“Like all well-run businesses, during the normal course of managing the firm we continually evaluate the size and shape of our global organization to ensure that it matches the needs of our clients,” Thomas said. “This practice is as important as ever during the pandemic.”
The firm said it would not elaborate on the new measures beyond Thomas’ latest statement, according to Bloomberg Law.