Diana Marszalek 14 Apr 2020 // 8:37PM GMT
NEW YORK — Omnicom CEO John Wren confirmed Tuesday the holding company would be furloughing and cutting staff across agencies, including its PR firms, as the Covid-19 pandemic continues taking a toll on business.
The furloughs and layoffs are expected to begin this week, an Omnicom spokesperson said.
“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,” Wren said in an internal memo that PRovoke Media obtained.
“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,” he wrote.
Wren also said that members of the Omnicom executive leadership team would be cutting their salaries by one-third, and he will be forgoing his entire salary through September.
Whether leaders of the individual PR firms that are part of the Omnicom PR Group — which includes FleishmanHillard, Ketchum, Porter Novelli and Marina Maher — take salary reductions is up to each leader. Each agency is weighing how to handle salary issues themselves, the spokesperson said.
Wren outlined key steps Omnicom will be taking as it institutes sweeping changes as the result of the coronavirus outbreak. He wrote:
• 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% 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.
Wren started the memo by thanking employees for their recent efforts. “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,” he wrote.
“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.”