GSD&M to Axe up to 200 Staffers Due to AT&T Loss

'Giant Piece of Media' Business Went to Mediaedge

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NEW YORK (AdAge.com) -- Omnicom Group's GSD&M Idea City will axe between 100 and 200 staffers after losing its piece of AT&T's $3.4 billion media account, executives familiar with the matter said.
Idea City Chairman-CEO Roy Spence
Idea City Chairman-CEO Roy Spence

Idea City Chairman-CEO Roy Spence -- expected to this week to inform the employees who will be affected by the cuts -- declined to confirm the number of layoffs or whether additional staff reductions are forthcoming.

He did confirm, however, that the layoffs stem largely from AT&T's decision last month to consolidate its media account at WPP Group's Mediaedge:cia, and will largely affect Idea City staffers who worked on the business.

More jobs than work
"Mediaedge won the media business from Omnicom and us [and] we simply have more jobs than we have work on that media side," Mr. Spence said in an interview today. "It was a giant piece of media," he noted, adding that the agency will assist staffers to find new positions.

An Omnicom representative referred calls to the agency.

Idea City previously handled media planning and buying, including digital, for the telecom's landline business. Earlier this year, AT&T shifted lead account responsibilities from Idea City to Omnicom sibling BBDO, previously the agency for Cingular Wireless, now AT&T's mobile unit.

GSD&M declined to cite the size of its work force, but in 2006 the shop had 891 staffers, according to Advertising Age data. When the smoke clears, the agency will be down to half of what it was at its peak, according to one executive, who said the agency has already lost 100 or so employees in the past few months.

Austin and Chicago offices
The brunt of the most recent round of layoffs will be felt in the agency's Austin, Texas, and Chicago offices.

The embattled agency has also seen the departure recently of big-name accounts like Wal-Mart and Chili's. Mr. Spence insisted there are no plans to merge Idea City with any Omnicom sibling and said the shop is set to make a series of new-business announcements over the next few weeks, "from some existing clients and brand new pieces of business."
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