Will Shed 20 Agencies, Chop 850 Jobs, Restructure Organization

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LONDON (AdAge.com) -- Havas today reported a $64.9 million net loss for the first half of 2003, and confirmed plans for a

$200 million restructuring of the group.

Operating income dropped by 41% to $77 million, according to the company.

The troubled French advertising group, which saw revenues fall 19% to $942 million, is planning to chop 850 jobs and will sell or close 20 of its least profitable agencies.

'Improving efficiency'
In a statement, Havas said the restructuring of the group, first outlined on July 31, was aimed at "improving the efficiency of the group" and saving about $100 million a year.

Havas said it plans to integrate 17 new companies into the network. Of these, seven will come from the Specialised Agencies division and 10 -- expected to include direct marketing firm Brann Worldwide -- from Arnold Worldwide Partners.

Agencies not named
The company has not yet named these 17 companies, or the 20 others earmarked for closure or sale.

In its statement, Havas asserted that "it is no longer the number of creative networks or agencies that is important but the number and the quality of creative and innovative ideas."

The estimated pre-tax costs of the reorganization is $202.8 million, of which $39.4 million is layoff costs, $112.6 million on vacant space, $50.7 million in other exceptional charges such as IT reorganization, litigation and early termination penalties.

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