Madwell, an advertising agency, has furloughed 20-30 employees (about 28% of its staff) due to severe financial problems. The agency is facing millions of dollars in defaulted loans and has reportedly struggled to make payroll.
The furloughs follow the loss of a major client, Verizon, which resulted in an estimated eight-figure annual revenue loss for Madwell. Bank of America is seeking a court judgment against Madwell to recover over $4 million in defaulted loans. Employees were reportedly cut off from company accounts immediately following the furlough announcement.
Madwell's CEO, Chris Sojka, has reportedly lashed out at employees seeking clarification on the situation. A company spokesperson stated that Madwell aims to pay all employee wages and creditors, requiring cooperation from its largest creditor to achieve this goal. The situation is ongoing, with Madwell reassessing its options over the next two weeks.