Baby Bell SBC takes hatchet to marketing

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SBC Communications has dramatically slashed its marketing department and is weighing three separate reviews, including one for its $400 million direct marketing account.

The Baby Bell--which owns Ameritech, Pac Bell, Southwestern Bell and SNET--is on a corporate rampage to streamline operations. In just one month, the company has laid off hundreds of marketing, advertising and public relations employees in its Chicago, Connecticut, San Antonio and San Francisco offices.

SKELETON STAFF

Only a skeleton staff remains--four employees in each of the four key cities--with public relations outsourced to Fleishman Hillard.

In the wake of the upheaval, the telecom giant is also considering a review of the estimated $100 million Ameritech business and another for its newly announced local service SBC Telecom--as well as a third for the combined direct account of SBC and Ameritech.

Executives close to the situation said SBC is weighing a nationwide search to include a variety of roster and non-roster shops. An SBC spokesman saidno decisions will be made until several key executive slots are filled.

SBC and Ameritech spent almost $430 million in unmeasured media in 1998, according to Ad Age data. That figure includes direct marketing, promotions and special events, with direct representing the bulk. Brann Worldwide currently handles the direct account.

Ammirati Puris Lintas, Chicago, handles the Ameritech account. SBC is leaning toward putting that account up for grabs between its other two roster shops, GSD&M, Austin, Texas, and Goodby, Silverstein & Partners, San Francisco, according to three executives close to the company. GSD&M referred calls to SBC.

Ameritech media buying is handled by Carat USA, Chicago, and that business also could be up for grabs, one of the executives said.

Spending on the third review, for SBC Telecom, is undetermined. SBC plans to roll out the service to 30 cities over the next year. The assignment will likely include a lot of regional work.

SBC, which received final approval from the Federal Communications Commission to acquire Ameritech in October, has run through its communications department with a hatchet.

MORGAN GONE

The key positions the SBC spokesman referred to include a VP-brand management and advertising and a director of media services. William J. Morgan held the first position, but left the company two weeks ago. Charlene Lake, who had reported to Mr. Morgan, is temporarily filling in.

Mark Geller was director of media, but he also has left SBC. Mr. Geller's former department oversees all agency/client relationships.

Also gone is Joan Walker, formerly senior VP-corporate communications at Ameritech; Ms. Walker oversaw the review that chose Ammirati. She now holds the same title at Monsanto Co. None of the executives could be reached for comment.

The new staffers, who will be referred to as media managers, will coordinate marketing services, with the agency relationships still managed by the media services department, according to one executive familiar with the situation.

The displaced employees were offered the possibility of other jobs within SBC. Many took severance packages, but others committed to a 60-day waiting period to try to find other work inside SBC, one former employee said. The Chicago corporate communications department was the first to be dismantled, beginning on Oct. 29.

Copyright November 1999, Crain Communications Inc.

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