MPG Shrinks Staff by 10%

More Than 40 Lose Jobs as Clients Cut Back Ad Spending

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NEW YORK ( -- Havas' MPG laid off roughly 10% of its 460 person U.S. staff today, letting more than 40 senior-, mid- and junior-level executives go. The majority of the cuts were in its New York headquarters but also touched the agency's Boston and Chicago offices.

One of the employees who was let go today told Ad Age the layoffs were due to a cutback in ad-spending levels by clients.

In a statement, MPG cited a rough economic climate and a need to free up resources to support the agency's growth as reasons for its decision. MPG's North American CEO, Shaun Holliday, cast the layoffs as a cost-cutting measure necessary to help drive the agency forward in a tough economic time despite its recent new-business success, which includes the $100 million CBS Films and Virgin Mobile accounts. MPG also works with clients such as Sears and

"We are experiencing good momentum in the marketplace due to our recent successes expanding core client relationships and winning new business," Mr. Holliday said. "Cost reduction initiatives, such as those announced today, are not about shrinking the business into a more profitable core -- on the contrary, they are about funding and fueling growth."

Back in November Mr. Holliday replaced Charlie Rutman as CEO of MPG North America, overseeing all the operating business units of Havas Media in the U.S. and Canada, including MPG and digital unit Media Contacts. Mr. Rutman has since become a senior adviser to the agency.

Just last month Havas reported one of the strongest showings among major holding companies with a 25% increase in 2008 profits. For 2008 its income increased to $131 million from $105 million in 2007.

And in February, Havas announced another restructuring of its operations that brought together Euro RSCG Worldwide and Arnold Worldwide under a new entity called Havas Worldwide being led by Euro chief David Jones. As a result Havas is now made up of two separate umbrella units, Havas Worldwide, which manages the company's creative and digital capabilities, and Havas Media, which includes MPG and other brands.

MPG sibling Arnold also laid off 50 people from its Boston headquarters back in late October.