Live updates: Ad agency job losses, pay cuts and furloughs

All major holding companies have implemented some form of cost-cutting measure as the industry fights coronavirus.

The reality of COVID-19’s economic impact is being felt in full force as advertising agencies come to terms with job losses, pay cuts and furloughs. 

Every major holding company has implemented -- or is planning to implement -- a series of cost-cutting measures in a bid to self-preserve.

This is a regularly-updated collection of adland’s response to the coronavirus. 


Dentsu 

Dentsu Aegis Network has implemented a series of cost-cutting measures across the business as it navigates uncharted territory amid the COVID-19 crisis. 

Salary cuts and furloughs are reported to be among the moves made, affecting ad agencies including 360i, Carat and iProspect.  

A spokesperson for the holding company said in a statement: "Since the coronavirus outbreak Dentsu Aegis Network’s primary priority has been to protect our people, preserve and nurture our client relationships and to support the local economies and communities in which we operate. 

"As a result of COVID-19 business impacts, we are activating a set of cost saving measures across the company to ensure business continuity and to safeguard our people’s livelihoods around the world.

"We consider our people to be our greatest strength and are doing everything we can to ensure we have a healthy and sustainable business for them and our clients, after this crisis passes."


Omnicom Group  

Staff reductions, salary slashes and furloughs are taking place across Omnicom Group agencies, the CEO has confirmed. 

In a memo to all 70,000 global employees, John Wren explained that leadership will be cutting down their pay by a third, while he will forgo his entire salary until the end of September. 

Wren said: "Since my last note to you, we have solidified some of the internal measures to adjust our business to meet the changing needs of our clients. Regrettably, this will include furloughs and staff reductions across many of our agencies. We are doing everything we can to limit staff reductions, and to take care of those who are affected."

The CEO stressed Omnicom is limited the number of redundancies in exchange for furloughs wherever possible. He noted that, "with few exceptions," it has stopped all new hires, frozen salaries, and reduced the number of freelancers. Wren said leaders are attempting to move people from quiet business to more active parts of the network, including Omnicom Health Group.

Additionally, the holding company is eliminating discretionary costs and capital expenditures, including participation in award shows and industry events.

Below is Wren’s memo in full: 

As the impact of COVID-19 continues to evolve, we are focused on protecting the safety and well-being of our people, continuing to serve our clients and preserving the strength of our business.

I have personally heard from clients around the globe just how much they value the work you are doing in their time of need. Thank you for everything you are doing, despite all the challenges. 

Unfortunately, COVID-19 has had a profound impact on the economy, on our clients’ businesses, and in turn, on ours. While we hope for a swift recovery, we have to respond quickly to the reality of the moment, to ensure the sustainability of our business and our ability to continue to provide our clients with outstanding service.

Since my last note to you, we have solidified some of the internal measures to adjust our business to meet the changing needs of our clients. Regrettably, this will include furloughs and staff reductions across many of our agencies. We are doing everything we can to limit staff reductions, and to take care of those who are affected.

  • Where possible, our agencies will use furloughs rather than permanent reductions, so we can bring people back if, and when, conditions improve and client demand recovers.

  • Our agencies will participate in government subsidy programs around the world to reduce the number of permanent staff reductions we need to make.

  • We have expanded coverage in our U.S. health benefit plans for those affected by COVID-19.

  • We are actively looking to move people into areas of our business that are growing, such as Omnicom Health Group.

  • Omnicom’s executive leadership team, including our Network and Practice Area CEOs, are reducing their salaries by a third, and I am waiving 100 percent of my salary, through the end of September.

  • With few exceptions, we have stopped all new hires, frozen salaries, and reduced the number of freelancers we use.

  • We are eliminating discretionary costs and capital expenditures, wherever possible, including participation in award shows and industry events.

  • Lastly, we have suspended our share repurchase program, have strengthened our liquidity position through new financings, and are conserving cash wherever possible.

You are the heart of our business and that makes these actions extremely difficult. We have survived crises before. Our people and our company have shown tremendous grit and resilience and we will come out of this stronger.  

Thank you for your hard work and commitment during this difficult time. 

Stay home. Stay safe.

John


BBDO
The network has implemented a significant number of lay-offs, salary slashes and furloughs, Campaign US has learned.

The cost-cutting measures are far-reaching and vary in severity across markets as COVID-19 continues to ravage economies at different intensities. 

It is believed that BBDO’s North America presence lost a swath of high-level talent. Exact numbers are not clear at this stage, however, the New York office laid off somewhere near the high double digits, but no more than 100, say people with knowledge of the matter. 

BBDO President and CEO Andrew Robertson explained: "As John said in his note, this virus is having, and will continue to have, a profound effect on the economy, on our clients’ businesses, and therefore on ours. 

"Nobody really knows how deep, how long, or how much time it will take to recover. And of course it varies to some degree by vertical and by market. 

"Instead of simply hoping for the best, and planning for that, we have taken a very hard look at what we think will happen in both the short and the medium term and taken measures, around the world, to prepare for those scenarios. That means reshaping our agencies, both in terms of capacity, but also capability, to be competitive for what we think lies ahead. We’ve had to take some tough decisions on pay cuts, furloughs, and, regrettably, permanent reductions."

Robertson added: "I’ve been really impressed by, and am grateful for, the willingness of our agency leaders around the world to face into these challenges and do what needs to be done, and by the continued understanding and commitment of our people.

"One of our core people values is ‘they bounce back.’ In this business you can’t avoid or duck all the punches. But your ability to take them and bounce back up is what matters."


IPG 

CEO Michael Roth sent a memo to all IPG agencies on Friday April 10 informing them that leaders will need to implement a number of cost-saving measures including staff reductions and salary cuts. Agencies are expected to make decisions this week.

McCann Worldgroup
The network will be implementing a number of cost-cutting measures across all agencies, including staff reductions in some markets.

On Wednesday, McCann New York staff received a memo from McCann North America President Devika Bulchandani explaining that all employees earning more than $60,000 will take a reduction of 10 percent to safeguard jobs

Harris Diamond, chairman and CEO of McCann Worldgroup, said: "The current health crisis is constantly evolving, and creating significant economic impact. As we navigate through this, we are taking a series of steps to ensure we can appropriately support our clients as well as the long-term vitality of the agency.

"A variety of actions across our agencies are being implemented that include salary cuts, freezes on hiring and temporary labor, major cuts on non-essential spending, and furloughs in markets where that option is available. Unfortunately, reductions in staffing levels are also taking place in certain areas of the business.

"These are difficult decisions made in difficult times. Our goal is to service our clients while protecting as many jobs as we can, and we will of course provide as much support as possible."

Hill Holliday
The shop is reducing its total workforce by 10 percent as the IPG shop responds to the economic impact of COVID-19.

No more than 30 employees across Boston and New York were let go on Thursday, Campaign US understands. 

Chairman and CEO Karen Kaplan said the shop had done everything within its power to help safeguard jobs.

She explained: "As CEO my two most important job responsibilities are to protect our people and to protect our business. 

"We have instituted every cost saving measure and pulled every lever we had to protect jobs and protect our business: hiring freezes, travel bans, suspending the internship program, pausing freelance and overtime, deferring raises and promotions, we stopped spending on award shows, and the executive leadership team and I took pay cuts. And in retrospect, that turned out to be the easy part.

"We came to the difficult realization that we have to say goodbye to some really good people. These decisions were incredibly difficult but were made very thoughtfully and holistically in an effort to protect the most jobs possible and to best position the agency for the future. But even in tough times, Hill Holliday remains committed to taking care of our people."  

Employees who were affected will receive healthcare benefits, including mental health, that are fully paid by the agency for three months, according to people with knowledge of the matter. 

In addition, staff will be offered outplacement and job referral services at no cost to them.

R/GA
The agency laid off 10 percent of its U.S. workforce on May 1. Everyone affected will receive severance pay, and fully-funded healthcare benefits until the end of the year. 

Cost cutting measures that mitigated affected staff include: Executive pay cut at 10 percent; Reduced work schedules for internal teams and; Short-term furloughs for facilities staff as it works remotely.

"COVID-19 has forced a lot of companies like ours to make these very difficult decisions, but it was important to us to be able to take care of the talented individuals leaving us," said Sean Lyons, Global CEO, R/GA.

"While some of what we’re doing for our clients has changed, we’re still hard at work, and have found that R/GA’s natural resilience and range have helped us to deliver for those clients in new and unexpected ways. We remain grateful to all of our clients for trusting us to protect and grow their businesses."


Publicis

Digitas
The agency has implemented a number of cost-saving initiatives across its U.S. presence including salary cuts, furloughs and a number of staff reductions, believed to be less than five percent.

An agency spokesperson said: "The focus of Digitas US’ cost-cutting initiatives continues to be on serving our clients while protecting as many jobs as possible and ensuring we are best positioned for the future."  

BBH
The shop has cut an estimated 20 percent of total staff across New York and Los Angeles. 

Neil Munn, Group CEO of BBH, said: "COVID-19 has had a profound impact on the global business landscape. Regrettably, we will be restructuring our business in line with the new realities, to ensure we have the right set-up to meet future challenges and opportunities."  

U.K.
Publicis Groupe is making redundancies across its 5,000-strong U.K. operation because of the coronavirus downturn.

It is understood the job cuts will affect most of the group's U.K. agencies, including many of its creative, media, health, production and public relations shops.

Publicis.Sapient is not part of these U.K. cuts because it is managed globally.

A consultation on the redundancies will begin next week – an indication that a significant number of jobs could be at risk.


VaynerX

VaynerMedia
Less than seven percent of the global agency was affected as a result of both an internal restructure and adjusting to clients’ needs due to the impact COVID-19 within the past month.


Ascential 

MediaLink
Staff reductions, furloughs and pay cuts are among the measures taken by the consultancy group.

"In reaction to the both the public health and economic factors resulting from the COVID-19 pandemic and in line with measures taken by our parent company Ascential pLc, MediaLink, like much of our industry, has made the incredibly hard decision to streamline certain areas of our business," according to a statement from MediaLink.

The statement adds: "This includes a combination of staffing reductions, furloughs in business functions that have been temporarily but directly impacted and voluntary pay cuts by executive leadership."


Recruitment firm offers pro bono outplacement services 

Advertising’s talent acquisition company Grace Blue is offering its outplacement services at dramatically reduced costs or pro bono as the company shifts to help those who are losing jobs amid COVID-19 disruption. 

The program, which provides structured counsel to staff as they transition out of their roles and ensure they are set up for success for their next career change, includes crafting personal narratives, optimizing resumes, coaching them through the next interview process and handling this turbulent and ever-changing landscape. 

"Grace Blue has always had deep and strong relationships with the agency and brand community, and those partnerships are hugely important to us," said CEO Claire Telling. 

"As we all work through what is going to be a very worrying time for so many businesses, we want to continue to support our partners and their people who are going to be most affected by the challenging economic times ahead.

"We hope that this service will enable all companies to ensure that those people that have to be let go are well taken care of, and have every chance of success looking forward."

The services are being offered free of charge to small and medium-sized businesses, and at a significantly reduced cost to larger companies. The pro-bono and discounted program will initially be available in the U.S. and will be rolled out across Grace Blue globally.

Those interested in implementing the program at their company can contact together@graceblue.com.  

Subscribe today for just $89 a year

Get the very latest news and insight from Campaign with unrestricted access to campaignlive.com , plus get exclusive discounts to Campaign events

Become a subscriber

GET YOUR CAMPAIGN DAILY FIX

The latest work, news, advice, comment and analysis, sent to you every day

register free