GEORGESCU READIES SHIFT TO MORE PRODUCTIVE Y&R

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NEW YORK- Young & Rubicam Inc. CEO Peter Georgescu is planning changes at the company as he assumes more control from Chairman Alex Kroll, who is expected to retire this year.

Angling to put his own mark on the $7.9 billion agency behemoth, the world's sixth largest, Mr. Georgescu intends to recruit additional senior-level management while paring Y&R Advertising ranks in the U.S. by what insiders said will total "at least 80" of its 1,665 employees in coming weeks.

Mr. Georgescu refused to discuss the number of people and jobs to be sacrificed but said the move will help make Y&R more cost-effective and productive.

Another executive was more pointed: "If you're going to run business for profit, you have to step up and make realignments."

Mr. Georgescu denied knowing Mr. Kroll's private plans, but insiders expect him to relinquish his chairman's post to Mr. Georgescu by yearend.

Mr. Kroll did not return phone calls seeking comment.

In an exclusive interview with Advertising Age last week, Mr. Georgescu, 54, said he hopes to stabilize the agency's troubled London office, amass a strong senior management team and encourage clients to restructure their agency compensation arrangements.

"In the future, service companies can't run in pyramid structures. Our business can't be run that way," he said.

The London office has been devastated by the defections of CEO Jerry Judge, Managing Director Tim Lindsay and Director of Planning Paul Edwards. To shore up operations, Y&R is negotiating to buy into GGT, a creative, publicly held U.K. shop; a decision could come as early as this week.

Reflecting a sea change for an agency long viewed as an insider's club, Mr. Georgescu said he won't hesitate to hire senior-level managers who may not have traditional agency backgrounds.

Since Mr. Kroll relinquished his ceo post in December to Mr. Georgescu, a 30-year Y&R veteran, outside executives have joined the agency in senior posts, among them: Jack Kraft, a former Leo Burnett Co. executive; Robert Rene, a longtime associate of management consultant and Y&R Advertising Chief Operating Officer Steve Heyer; and Ed Vick, former president of Landor Associates.

Ted Bell, who joined the agency from Burnett last year, is expected to move to New York from London this summer.

"I'm not going to be shy at all about bringing people in," Mr. Georgescu said, adding that recruits with more diverse backgrounds reflect an overall shift in the agency business.

Some Y&R insiders have been rankled by the influx of outsiders. Susan Gianinno, exec VP-account managing director and the only woman on Y&R Inc.'s board, left the agency recently to join BBDO Worldwide.

Mr. Georgescu said he may not look outside the agency to replace Ms. Gianinno, but he is believed to be conducting a separate outside search for a senior-level media executive to focus on new media and interactive developments.

Concerning compensation, another priority for Mr. Georgescu-and one of Mr. Kraft's mandates-is to restructure client compensation agreements so that the agency is rewarded on a performance basis. Kraft General Foods and Sears, Roebuck & Co. are already said to have performance-based compensation systems in place with Y&R.

More immediately, Mr. Georgescu is working to help the agency salvage its Warner-Lambert Co. account. The company is expected to make a decision on Y&R's fate this week.

Laurel Wentz in London contributed to this story.

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