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Online Exclusive: Agency News


Move Follows Sears' Fee Cuts

By Published on .

CHICAGO (AdAge.com) -- The Chicago office of WPP Group’s Ogilvy & Mather last week cut about 12 employees, or 6% of its staff, said executives familiar with the matter.
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The reductions follow Sears, Roebuck & Co. slashing its fee paid to the agency in April.

180 employees
The agency, which has about 180 employees, wouldn’t comment on specifics but acknowledged the layoffs in a prepared statement.

“Ogilvy & Mather, Chicago, has eliminated some positions from the agency,” the statement said. “These actions were warranted by the general softness of the branding business of clients in the first quarter of 2005.”

Ogilvy laid off more than 10 employees in June 2004.

Ogilvy handles the accounts of Sears and Unilever, for its Dove brand.

Kmart merger
The cuts follow the decision last month by Sears -- which merged with Kmart earlier this year to create Sears Holdings -- to cut its agency fee. The Sears’ move also forced cuts at roster shop and Ogilvy sibling Y&R, Chicago.

Last year, Sears spent about $640 million on advertising, split between Y&R and Ogilvy. Kmart spent about $175 million; its agency was Grey Global Group's Grey, New York, now part of WPP.

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