Maja Pawinska Sims & Diana Marszalek 24 Apr 2020 // 4:04PM GMT
NEW YORK — Omnicom CEO John Wren has confirmed the holding company has made layoffs across its agencies, including its PR firms, as a result of the ongoing Covid-19 crisis.
Wren had warned in an internal memo on 14 April that furloughs and layoffs were on their way across the company, whose PR agency group (OPRG) includes Ketchum, Porter Novelli and FleishmanHillard.
In another memo issued yesterday, and seen by PRovoke, he said: “This has been a very difficult couple of weeks. Regrettably, our companies had to take a number of job actions including reduced work weeks, furloughs and layoffs for many of our colleagues. We had to part ways with good, talented, hard-working people which is always tough, but even more so in this environment.”
Wren said agency leaders had “worked tirelessly” to limit the number of people impacted: “They took advantage of government subsidy programs wherever available, and together with many others in our agencies, are taking voluntary pay cuts.”
He added: “Although it’s not easy to predict when our industry will recover, we have taken actions now that will help us to continue to provide our clients the service and solutions they need, safely weather this crisis, and emerge on the other side with strong, competitive agencies. At that time, we hope our colleagues can return to full time, and those that were furloughed come back to work.”
It is believed that agencies have not been given specific mandates for the number of people they need to cut: decisions are being made at agency level on a case-by-case basis depending on factors such as performance, projections for Q2 and the rest of the year, and specialism, since areas such as crisis management and public affairs are still performing strongly.
The number of layoffs across OPRG is not yet known, although the picture may be clearer after the earning calls Wren is due to make on Tuesday. The picture, however, across the holding company, including its advertising, media marketing and digital agencies as well as PR, looks bleak: one source within OPRG suggested that the total number of jobs lost globally amounted to “thousands”.
Within Ketchum, for example, it is thought that there may only be around a dozen redundancies in London, but the number in North America could be closer to 100.
Ketchum would not confirm numbers, but said in a statement to PRovoke: “Due to the macro-economic environment caused by the Covid-19 pandemic, our business has felt the impact of reduced consumer and client spending. As a result, this week we regrettably took a combination of actions, primarily senior-level pay cuts and furloughs.
“Our goal with these actions was to share the burden, protect as many of our people’s jobs as possible, and align with government relief programs to protect people’s compensation. Our business was strong before Covid-19 hit the economy and we expect it to rebound, allowing us to reinstate our talent as quickly as possible while helping our clients’ businesses recover.”
This was echoed by a statement to PRovoke from FleishmanHillard, which has also not confirmed the number of layoffs: “The Covid-19 pandemic is having a serious impact on people and economies around the world. As our clients are affected, so is FleishmanHillard, but we are committed to protecting as many employees’ jobs as possible during this crisis," the agency said.
The statement continued: "We acted quickly at the start to offset the reduction of demand for services in some parts of our business, and shift resources to meet the increase in demand for response and recovery services.
“It’s always difficult to part ways with colleagues, but we have had to take actions to lower our costs in a number of our offices around the world, while maintaining the capacity to provide excellent service for our clients across geographies and industry sectors, in line with changing expectations. As much as we’re able, we’re taking a creative approach to managing our business, to actions we have to take with our staff, and to positioning ourselves to reinstate staff quickly when work levels return.”
Porter Novelli, however, indicated in a statement to PRovoke that the agency has not been as greatly impacted by the pandemic as other firms. “This global crisis has presented businesses both large and small with a myriad of challenges. Porter Novelli’s client roster is not overexposed in the industries currently hardest hit by the Covid-19 pandemic, so for now, we haven’t had to make major adjustments. Our extraordinary workforce agreed to voluntary pay and temporary time deductions for the second quarter, and as a result, our force reduction has been minimal. Our focus remains on protecting and prioritizing our employees, delivering excellent counsel to our clients and driving business results," the agency said.
In his latest memo, Wren also looked to the future, saying the group was “planning for returning to our offices” in some countries such as China, Germany and South Korea. He added that Omnicom had formed “a multidisciplinary committee to develop guidelines for how its offices should open once government officials give us the green light to do so.”
He concluded the memo by saying: “During this time of extraordinary challenges, I continue to be inspired by the way you are managing to keep working, pitching for business, and delivering innovative solutions to our clients… You give me complete confidence we will weather this crisis and be well-positioned for success as client business returns.”