SPRINT LOSS LEADS JWT TO CUT HALF OF S.F. STAFF BILLINGS OF OFFICE EVAPORATE FROM $200 MIL TO $50 MIL

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J. Walter Thompson USA this week begins laying off close to half of its San Francisco office, a result of the loss of the $150 million Sprint Corp. account.

The office, with 200 employees, is expected to shrink by some 80 to 100 staffers, executives familiar with the situation said.

Officially, JWT executives described that number as "way too high." Previously JWT said only 50 people worked on the account.

The loss of Sprint to McCann-Erickson Worldwide, New York, leaves the office with about $50 million in billings, primarily Chevron corporate branding, United Distillers & Vintners, various Nestle products and SunSweet Prunes.

OFFICE WILL REMAIN OPEN

Although the loss is a big blow to the agency, JWT West CEO Larry Tolpin said the office will remain open.

"We're not going to close San Francisco," he said. "We've just started to turn around the place" so that it's now perceived as a creative-driven agency.

In some ways, he said, the departure may help the shop on the new-business front-"We won't be perceived as just Sprint's shop anymore," he said.

Earlier this year, Sprint hired Grey Field as director of marketing for its consumer business, and Mr. Field once worked for AT&T Corp., where his agency was McCann. While Sprint said he was several rungs removed from decisionmakers, another executive said Mr. Field was instrumental in moving the business to McCann.

About three months ago, JWT presented a creative package to Sprint for a branding campaign themed "Sprint ahead." The strategy was to expand that branding to the work of all Sprint agencies, including Grey Advertising, New York, which handles business-to-business, and Publicis & Hal Riney, San Francisco, which handles Sprint PCS.

MCCANN EYES MORE WORK

McCann is believed to have its eye on those remaining pieces of the Sprint account, with spending estimated at $155 million.

The move of the core Sprint business to New York also is a blow to the San Francisco and West Coast ad communities, which have seen a number of high-profile clients in the West-or that traditionally used West Coast agencies-shift spending eastward.

"There seems to be something of a market correction going on," a veteran West Coast agency executive said of the account exodus.

Bank of America, founded and long based in San Francisco, picked New York-based Deutsch for its account in March 1997, after years at hometown agencies, the latest being Ketchum. A small part of the business went to Deutsch's Santa Monica, Calif., office.

Intel Corp. this year added Messner Vetere Berger McNamee Schmetterer/Euro RSCG, New York, as a second shop to Euro RSCG DSW Partners, San Francisco.

When Dell Computer Corp. opted for a global brand campaign, it passed over longtime product shop Goldberg Moser O'Neill, San Francisco, for J. Walter Thompson USA, Chicago and New York. Dell then fired JWT and hired BBDO Worldwide, New York.

Although local agencies coveted the Charles Schwab & Co. account, long in-house, when the brokerage picked an agency it went to BBDO Worldwide, New York and Los Angeles, and Suissa Miller, Los Angeles.

"Nothing has gone terribly wrong, but [the West Coast] doesn't seem like it has the same fire either," said one West Coast executive.

STRATEGIC DISCIPLINES?

Mike Agate, president of Select Resources International, an ad consultancy in West Hollywood, Calif., put it this way: "When someone comes to us for a national branding assignment requiring strong strategic disciplines, there are not a lot of agencies that can do that here."

Jeff Goodby, partner, Goodby, Silverstein & Partners, San Francisco, whose agency has helped fuel the city's growth in ad billings and creative reputation, said the moves are to be expected.

"Clients go anywhere to get the right stuff," he said. "You can't expect them to stay in San Francisco because they like to eat crab."

Contributing: Beth Snyder, Mercedes M. Cardona.

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