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Job Cuts Follow Volkswagen, Intel Media Account Losses

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NEW YORK ( -- MPG North America, the media planning and buying unit of agency holding company Havas, laid off 60 employees, a spokesman for the company said today. The layoffs, made yesterday, represent 15% of the company's workforce and are the result of MPG's loss of the media account for Volkswagen of America and Intel.
MPG has been hard hit by the loss of the Volkswagen and Intel accounts.

An agency review on the $430 million account pitted MediaCom, VW's media buyer in most parts of the world outside of the U.S., against MPG. MediaCom, formerly part of Grey Global Group and now owned by WPP Group, prevailed in January. MediaCom now controls most of VW's $800 million global account.

MPG handled VW's buying and planing for nearly a decade.

MPG sibling Euro RSCG, which handled creative duties for Intel, backed out of the chip maker's global $300 million review in January. MPG handled media buying and planning on the account. The account is expected to go to Interpublic Group of Cos.' McCann WorldGroup.

The changes come just as new leadership arrives at MPG. Last month, the company named Charlie Rutman, formerly president of Aegis Group's Carat USA, as CEO for North America. Mr. Rutman starts at MPG April 4.

Havas for months has been seeking a joint-venture partner for MPG, but its efforts have been hindered by uncertainty over Havas' fate. The company's largest single shareholder, French corporate raider Vincent Bollore, holds 20% of Havas, and has been pushing for management changes. Alain de Pouzilhac, Havas' CEO, has resisted and continues to press Mr. Bollore for details on his intentions. Havas last week reported a net profit of $44.7 million compared with a loss of $295 million in 2003.

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