Chicago-based public relations firm Edelman is laying off 390 people or about 7 per cent of its workforce, a reversal of an earlier pledge to avoid layoffs during the Covid-19 pandemic.

According to a report in Chicago Tribune, Edelman, which has about 5,700 employees worldwide, would also cut salaries from 5 per cent to 20 per cent for the senior staff not affected by the layoffs.

In an email, Richard Edelman, President and CEO, explained the move.

"This decision is gut wrenching, especially as I told you in March that we would have no job losses due to the pandemic. Despite all efforts, we are beyond the threshold of loss-making and to ensure the long-term health of our business, I must change course," he told the employees.

The PR firm cited "a succession of body blows" to the business, with travel, hospitality, automotive and airline clients facing "historic declines in demand."

Declining oil prices brought "massive cuts" in the firm's energy business, he added.

In addition to severance, the affected employees would receive career transition services, employee assistance programming including "emotional support" and a $1,000 credit toward personal technology such as a laptop.

This comes after Richard Edelman assured staff in March that the jobs of all its 6000 employees across the world are safe, and that there wouldn’t not any job losses related to the COVID-19 situation.

Founded in Chicago in 1952, Edelman generated $892 million in revenue last year. Edelman handles large clients such as Microsoft, HP, Paypal, OnePlus, Swiggy, PepsiCo among others.