FCB LAYS OFF 7% OF IRVINE, CALIF. STAFF

Fate of Entire El Segundo Office in Question

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SAN FRANCISCO (AdAge.com) -- Interpublic Group of Cos.' Foote, Cone & Belding, Southern California, Irvine, laid off about a dozen of its 220 employees, or about 7% of its staff, on Thursday, an executive familiar with the situation said.

The FCB office, which handles Yum Brands' Taco Bell account, also had an additional 60 employees in field offices who were not impacted by the move.

"We need to get our costs in line with our revenue," the executive said, adding most of the layoffs were in support staff.

El Segundo office
The Irvine layoffs are unrelated to the fate of FCB's El Segundo, Calif., office, whose main client was the estimated $50 million Mattel boys toys and entertainment business. FCB declined to defend the account. The future of the El Segundo shop, with about 20 remaining employees who report to FCB Chicago, is undetermined.

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It also was unclear whether the FCB Southern California layoffs would signal another significant round of cuts at Interpublic shops. Last year, Interpublic cut 5,200 jobs ,and in the first quarter of this year it eliminated 1,000 jobs.

Forced out of Hyundai review
The Irvine office, which was well positioned for a shot at the $360 million Huyndai Motor America's creative and dealer account, was forced by headquarters to drop out of the pitch, presumably due to a shot at prospective business from anchor Interpublic client General Motors' Corp.

Other FCB Southern California accounts include Hilton Hotels Corp., Taylor Made-Adidas, Kawasaki Motors Corp., Western Digital, Sunkist and the Hong Kong Tourism Board.

Nationally, overall ad agency employment this year has continued to fall. As of April, 182,900 people worked in ad agencies, down 9.8% from its August 2000 peak, according to the Bureau of Labor Statistics.

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