CP&B today is laying off 10% of its staff, Ad Age has learned. CP&B has an estimated 650 employees in the U.S. and another 100 overseas in its London and Gothenburg, Sweden offices.
According to executives familiar with the matter, the layoffs span CP&B's three U.S. offices -- Los Angeles, Miami, and Boulder, Colo. -- but the bulk of them will occur in the latter two cities. The layoffs are said to only affect the agency's U.S. offices.
It's believed that the layoffs are in anticipation of a reduction in the shop's Microsoft business, which is prepping for a review, and in response to the loss of Arby's, which decamped in the fall.
According to executives familiar with CP&B's Microsoft business, the agency in the middle of last year saw its fee slashed. Like other Microsoft agencies, it was also subjected to a jump-ball setup where agencies compete for each new assignment. Ad Age just this week reported that Microsoft was prepping to launch a massive marketing review with the hopes of finding a holding-company solution. CP&B still handles some XBox work.
Arby's, which CP&B won in early 2012 without a review, in October began circulating a request-for-information to creative agencies just after its new CMO, Rob Lynch, joined. CP&B was hired when Russ Klein -- who worked with CP&B when he led Burger King's marketing -- joined the fast-food chain. Mr. Klein left Arby's in May. CP&B said that it chose to not participate in the review.
The layoffs also come in the wake of significant management changes. Although CEO Andrew Keller remains at the helm, three agency partners left in December. When Chief Creative Officer Rob Reilly departed after more than a decade, the agency chose to restructure the creative department to give executive creative directors of its individual offices more autonomy.
Mr. Reilly's wife, Partner and Managing Director Laura Bowles, left at the same time. Ms. Bowles was a 16-year veteran of the agency and ran the Volkswagen account. Also parting with the shop late last year was the agency's Chief Operating Officer Eric Lear.
Last week, one of CP&B's four original partners, President Jeff Steinhour, moved to vice chairman. He was succeeded as president by Steve Erich, who was named partner and managing director in 2008 after joining the agency in 2004. Filling Mr. Lear's chief operating officer role was Mike Saunter, who was most recently chief financial officer at Warner Music International.
Mr. Erich issued a statement Thursday morning: "As many people in our industry know, Microsoft moved to a roster agency model back in November and on Monday announced that they'll be conducting a review of all their agencies. Unfortunately these decisions have put us in the position where a staff reduction is necessary. Today we'll be releasing approximately 10% of our staff across our U.S. offices. While these cuts won't in any way diminish our ability to serve our current accounts nor go after new opportunities, this is an incredibly difficult decision to make as it affects our colleagues who have made many contributions to CP+B over the years. We will do all we can to help them transition to new opportunities and hope that with new business growth, many of them will be back with us soon. "