"The bottom line is this: When you work for Omnicom, you have to be very performance-oriented," said one executive, who asked not to be identified. "If you don't meet certain targets, you have to do something."
The executives declined to say what goals DDB failed to meet when the quarter ended June 30. DDB's wins this year have exceeded losses, and 2002 client spending at some of DDB's major accounts-such as McDonald's Corp., Anheuser-Busch Cos. and State Farm Insurance-has remained consistent with spending in the past two years, according to Taylor Nelson Sofres' CMR figures.
DDB Worldwide CEO Ken Kaess and DDB, New York, President Bob Kuperman did not return calls. Omnicom President-CEO John Wren did not respond to an e-mail request.
One DDB executive, a VP, said the wage freeze was mostly executed on upper management and those with high-end salaries. Combined with a halt on hiring, the executive said it was a "pre-emptive strike" against possible layoffs.
In April, Tribal DDB trimmed 12 jobs, or a third of its workforce. In January, the Chicago office cut 37 staffers. And in November of last year, 20 to 25 employees were let go from the New York office.
A salary freeze has been in effect at Omnicom's TBWA/Chiat/Day since late last year, but the agency has still been able to fill vacant positions. BBDO Worldwide, Omnicom's third global agency, had layoffs earlier this year but is not under a wage or hiring freeze.