CEDIA Layoffs & New Headquarters

cedia logoMy assistant spotted it immediately. “There’s a strange letter in today’s mail,” she said with a slight hesitation in her voice one day last week as she handed me a small stack of mail that she had just picked up from our company post office box. That hesitation in her voice wasn’t so much concern as it was uncertainty as to whether she should bother to bring it to my attention. After all, it could simply be just another example of cleverly disguised junk mail.

But when I opened it, I knew immediately – this was not junk mail…

I immediately cycled through the stack she had handed me to find the envelope to which she was referring. It was pretty obvious – a plain white business-sized envelope with our address typed or printed on the face of it, but with no other identifying information: no logo, no return address, nothing at all. The only other piece of information we could glean – the stamp cancellation was marked “Indianapolis, IN.”

I set the stack aside and opened the envelope. Inside were two plain white sheets of normal sized paper. One was completely blank, front and back. The other had one simple paragraph of text and, underneath that, what appeared to be an image of a Facebook post with another paragraph of text. There was no name, signature, or any other information as to who sent this item. There wasn’t even a date reference, although the stamp cancellation read “18 April 2017.”

‘CEDIA is Being Run by a Madman’

The first line of the text jumped off the page and grabbed my attention. It said, or spat really: “CEDIA is being run by a madman.”

Yes, an interesting journey was clearly about to begin. The rest of the text was a pretty damning condemnation of CEDIA’s CEO, Vin Bruno, but it also contained several specific and surprising allegations. And the first surprising allegation is that the organization had laid off six members of their staff – something we had heard nothing about up until now.

This allegation of a staff layoff was of particular interest to us. Earlier this year in January, CEDIA announced that they had sold off their show, once called the Expo, to an exposition company called Emerald Expositions. This was surprising news and was accomplished with no advanced warning to us, or to CEDIA members. The details of this major transaction have never been disclosed.

When we spoke with Bruno in the wake of that announcement, we specifically asked about staff layoffs – a logical question, given the fact that much of their staff was explicitly dedicated to putting on the show. With no show, surely a staff layoff was forthcoming. And we weren’t the only news organization that asked about staff cutbacks.

But Bruno assured us, as he did the others, that there would be no staff layoffs. On the contrary, Bruno told us, the organization will be launching multiple, all-new initiatives, many related to education, training, and outreach – and they would simply redeploy their staff to these new initiatives.

But now, I’m sitting here holding a document in my hands that says layoffs have indeed hit the organization. And while a layoff of 6 employees may not seem like a big deal, this was fully 15% of their entire headquarters staff of about 40 people or so. We would later learn that the percentage of staff adjustments was even higher than we thought.CEDIA sells off show

Then…Another Anonymous Communication Arrives. Unrelated to the First

But before we could get our investigation started on our mysterious letter, we received another unsolicited communication from what we believe to be a different CEDIA-related source. This second anonymous source sought to let us know that there recently was a very interesting local newspaper article that announced that CEDIA is building an all-new headquarters facility in a nearby town called Fishers. There is, we were told, a very interesting twist to this second surprising story.

After digging up that article, we discovered that the twist was that the city of Fishers, in order to preserve prime commercial space for commercial entities exclusively, had enacted special zoning ordinances for the section of town where CEDIA was planning on building its shiny new headquarters. This special zoning precluded sales to tax-exempt entities. That meant that the non-profit CEDIA would be required to not only shoulder the costs of building this new headquarters, but it would also be forced to pay the city a substantial $141,710 a year under a “minimum taxpayer agreement.”

We also found this quote interesting from the April 21, 2017 Indianapolis Business Journal article that broke the news about the headquarters move: “CEDIA officials declined to comment on the relocation.”

This news was yet another topic of particular interest to us – not just because of the potentially questionable fiscal soundness of this deal – but that there was a plan to build new headquarters for CEDIA at all. In our discussions with CEDIA’s Bruno, we were told that they would be completely remodeling their existing headquarters building. We had not yet reported this news to our readers because we were led to believe that there would be more details forthcoming.

Now we learn that – much to our surprise – there is another undisclosed plan: to construct a new headquarters facility.

Our Investigation – We Talk to One of the Affected Employees

First, let me say that our investigation continues. However, we were able to speak with one of the newly unemployed CEDIA staff – whom we’ve determined was not the author of our mysterious letter – and who spoke to us on the condition that their identity be kept anonymous, as this person was very concerned about retribution from the organization.

This source did, however, confirm one of the assertions in our mysterious letter – CEDIA had in fact laid off six members of the staff – including a couple of “senior directors”. Some of these people were relatively new, some had been there as long as a decade or more.

This person also told us that the staff had received this same assurance we did, that there would be no staffing changes as a result of the sale of the show. Those let go, we were told, had no idea that layoffs were even a possibility…let alone coming at them.

Our Investigation – CEDIA’s CEO Responds

Photo of Vincent Bruno

Vincent Bruno, CEDIA CEO

We reached out to CEDIA CEO Vin Bruno with whom we spoke on Wednesday as he was in a car on the way to the airport in Indianapolis, heading to his home in New Jersey. Bruno was patient and forthcoming as we asked about the items we had recently uncovered about the organization.

When we asked Bruno about the layoffs, he answered without the slightest hesitation.

“We made organizational changes to address the needs of our members,” Bruno said firmly. “Those positions that I eliminated, and it was my decision, were positions where, for maybe years, we were overspending on areas that weren’t important to our members. One of the cutbacks was an accountability issue. So in total, I cut 6 positions, I removed 3 requisitions, and I reorganized – my HR Manager resigned a couple of months ago, although she’s still working for us on a consulting basis – I’m just moving someone who works within the company to be the HR Manager. So 6 people were cut, 3 jobs were eliminated that were requisitions, and 1 [change] was somebody moved from one place to another.”

Requisitions are requests by various department managers to create a position and hire someone to fill it. Bruno told us that basically he “right-sized” the organization as it had too many people “not doing the right things” and in some instances “they were the wrong people.” Certain members of the Board of Directors, Bruno told us, “were not happy” with these changes, but he’s confident that these are the right moves for the organization.

“It was time for an organizational ‘check up’ and correction…that’s all it was,” Bruno said.

A Lesson to Senior Managers

These changes, Bruno also said, were “not at all” related to the sale of the show. Not only that, but he maintains “…these changes should have been made five years ago.” He views this move as a lesson for his senior management. “Remember…our senior managers,” Bruno added, rhetorically addressing those top managers, “we are spending our members’ money.”

“If I didn’t make these changes, I wouldn’t be doing my job,” Bruno said confidently.

In all, Bruno admitted that he made an 18% change in staffing levels (including all changes, some of which we were unaware). “I’ll tell you, I’m proud of it,” Bruno said.

Members, the CEO proclaimed, value workforce development and consumer awareness. And this is where he plans to focus his and the organization’s attention. He talked about his two new hires: Walt Zerbe (from Legrand) and David Meyer (from Kordz) both of whom will beef up the organization’s education and workforce development initiatives. “A big investment” he tells us.

Building a New Headquarters?

When we asked about this news we discovered of CEDIA building a new headquarters facility in Fishers, there was a brief pause.

“So…I am down to my last bad contract, OK?” Bruno said. “Selling the show relieved us of some hideous contracts. The last bad contract that I have is with the lease of the building that we’re in right now.”

According to the CEO, the organization is saddled with a lease rate way “over market price.” This being the case, he is looking at buying land…and building a new headquarters. But the IBJ story “is all wrong,” he says.

We asked, why is the IBJ story wrong? We’re not paying any “minimum tax,” Bruno tells us. As a result of the moves made by Fishers (the minimum taxpayer agreement identified in the IBJ article), Bruno says they are now looking elsewhere…perhaps Zionsville. “There may be an opportunity for CEDIA there.”

Bruno tells us he can buy land and build an all new HQ building and it will cost less than staying in the building they are in right now. Their lease is up in October, but he has negotiated a month-by-month extension to buy the organization time to find – or more likely build – an alternative home.

Why didn’t CEDIA set the record straight with the IBJ reporter when they had the chance? According to Bruno, the reporter called for comment while they were still in negotiations with Fishers…they didn’t have any answers for public consumption at that time. Photo of CEDIA16 show floor

So What Do We Think About All Of This?

It is not uncommon for us to hear of turmoil within organizations in the midst of change. It is not uncommon for disaffected individuals to contact us about the matter. And often, when we investigate we learn that the “truth” is somewhere in the middle between the feelings of those displaced, and those of the management who displaced them.

In this case, we are surprised by the amount and the depth of the turmoil that appears to be taking place at CEDIA. We have had many conversations with CEDIA-connected sources over the last couple of years and many of those interactions have been pretty intense.

A Troubling Lack of Transparency

There is a new CEO, and he is driving substantial and fundamental change. Turmoil is to be expected, as people tend to resist change.

But we continue to be troubled by a lack of transparency at this organization. While we find it admirable that the CEO is willing to take our calls and address the issues we uncover – we shouldn’t need to uncover issues.

Remember Who Owns the Organization

CEDIA is a member-owned organization. Those hired to guide the group should have a strong inclination to be as transparent as possible with their owners. Most significant decisions should be offered to the membership for comment. Major decisions should seek ratification by the membership.

Many members have told us they had no idea the group was planning to sell the show, the single greatest revenue generator for the organization. Whether this decision is right or wrong, members should at least have an opportunity to input their comments.

Building a new headquarters building is a signficant multi-million dollar investment. Here again, we believe that many (most?) members are unaware of this plan. Cutting staff by almost 20%? Another big decision that could change the nature of the organization – for better or for worse.

An Apathetic Membership

Truth be told, the CEDIA membership is largely apathetic – busy with their own issues on a local level. But just because the membership doesn’t ask the right questions, it doesn’t mean the management is relieved of the responsibility to tell them what they need to know. Or, should we say, what they have a right to know.

Yes, there is a Board of Directors involved. Yes, there is an Executive Committee involved. And yes, in theory, these groups represent the interests of the members. For normal day-to-day decisions, this management system should be more than sufficient. But for major decisions – members should be involved as well.

Discuss and Disclose

We have no doubt that CEDIA marketing is communicating more frequently now than ever before, in part because of their CEO who has a background in marketing. We’ve seen the glitzy new CEDIA brochures and flyers.

But communication on these major issues – some involving millions of dollars of member money – are not being adequately discussed or disclosed with the group’s owners.

Learn more about CEDIA at: www.cedia.net.

Think we got it wrong? Share your thoughts in the comments section below this article.

About Ted

A sales and marketing specialist - primarily in the technology industry - I've experienced a sort of "circle of life" in business. I've been a mass merchant retailer, a specialty retailer, a specialty manufacturer, a large volume manufacturer, a distributor, and even represented sales representatives. Now the owner of a marketing company that works with a variety of businesses on improving their strategic marketing and business development - I analyze issues from all angles to develop holistic solutions.

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