Pallotta TeamWorks Closes, Lays Off 250 EmployeesPallotta TeamWorks, the "controversial" for-profit promotions company that sponsors several AIDSRides and other events nationwide, on Saturday announced that the company has laid off 250 employees and is closing its Los Angeles-based office as part of a "cost-cutting" move, the San Francisco Chronicle reports (Hendricks, San Francisco Chronicle, 8/25). The Washington Post reports that while Pallotta officials could not be reached for comment yesterday, the layoffs come "amid a falloff in donations, rifts with sponsors and questions about excessive overhead costs" for Pallotta-produced events. Participation in and contributions for Pallotta fundraisers, including its AIDSRides, have dropped off within the past year (Argetsinger, Washington Post, 8/26). Janna Sidley, a spokesperson for Pallotta, said that the company hopes to rehire some of the laid-off employees in the near future. However, the closure and layoffs have raised "doubts" about the future of the company. According to Sidley, Pallotta plans to hold several breast cancer walks scheduled for later this year in Atlanta, Los Angeles and New York.
Pallotta has been criticized over the past few years for "spending too much on overhead at the expense of charities that its events are designed to support," the Chronicle reports (San Francisco Chronicle, 8/25). Last year, two sponsors of the California AIDSRide ended their agreement with Pallotta over a dispute about the proceeds of the event. The Los Angeles Gay & Lesbian Center and the San Francisco AIDS Foundation established their own AIDS ride, AIDS/LifeCycle, over concerns that Pallotta misspent funds raised from the California AIDSRide. Pallotta has also faced criticism for the purchase of expensive "comforts," such as cucumber masks and massages, for event participants. In May, the Washington, D.C.-based organizations Whitman-Walker Clinic and Food & Friends announced that they would end their relationship with Pallotta after this year's D.C. AIDSRide (Kaiser Daily HIV/AIDS Report, 8/12). In July, organizers announced that the Heartland AIDSRide, which covered 500 miles between the Twin Cities in Minnesota and Chicago, would end after this year as a result of decreased participation and increased expenses (Kaiser Daily HIV/AIDS Report, 7/30). Craig Shniderman, executive director of Food & Friends, which provides meals and groceries to people with HIV/AIDS and other illnesses, said that while Pallotta events are well-produced, safe and enjoyable for participants, they are costly to produce, adding that a locally managed fundraiser might be more efficient. He said that Food & Friends, which plans to stage its own bicycle fundraiser next year, learned how to stage such an event from Pallotta. "They gave us a start in something we intend to continue and improve upon. We paid for a lot of meals with those Pallotta-produced rides," he said (Washington Post, 8/26).