After reading the email in full, I would talk individually to the staff, taking notes on their reactions. I would outline a different plan, to talk to Larry about. By comparing both, we should be able to form a compromise. Once we have solidified a new arrangement, I would suggest Larry call a staff meeting to explain the changes made.
Although the scenario, doesn’t say Larry, Samuel and James maybe friends outside the office. If this is so. Larry crossed the fine thin line Boss versus Friend. Once that line is crossed, there is simply no