Since the merger became official Oct. 4, approximately 100 employees have been laid off at Y&R. An estimated 80 of them were in the corporate area that includes the legal, finance, purchasing, information systems and human resources departments. Fifteen employees were laid off on the Y&R agency side.
While the corporate downsizing was expected -- it was hinted at by WPP CEO Martin Sorrell, who said it would occur to eliminate redundancies with WPP's corporate operations -- the size of the cuts and the layoffs at Y&R Advertising came as a surprise. According to executives close to the situation, the agency layoffs occurred because certain departments have failed to "make their numbers" for this year.
A spokesman at Young & Rubicam would not comment; Sir Martin could not be reached at press time.
"It's not a big deal," said a Y&R executive who requested anonymity. "When you are acquired by another company, there are going to be obvious reductions in staff."
CUTS POSSIBLE ELSEWHERE
The swift sword of Mr. Sorrell is not expected to rest soon. More cuts are anticipated within other Y&R divisions before the end of the year. Other Y&R companies that may be affected include media specialist the Media Edge; multicultural agencies Bravo Group and Kang & Lee; direct shops Impiric and KnowledgeBase Marketing; public relations groups Burson-Marsteller, Robinson Lerer & Montgomery and Cohn & Wolfe; brand identity specialist Landor & Associates; London design shop the Partners; healthcare agency Sudler & Hennessey; and British tech agency Banner Corp.
The first layoffs were executed very quietly, without official communication from management to employees. Some staff members found out about them from hallway conversations.
On the day of the merger, Mr. Sorrell sent a memo via e-mail to the Y&R staff welcoming all the separate companies. "All these `tribes' are warmly welcomed," read the e-mail, "both because of their successful records and their distinctive brand strengths." While the missive contained much praise for the performance of Y&R and its future within WPP, no specific mention was made of proposed staff cuts.
"The only dangers are the familiar ones," Mr. Sorrell ominously warned in the memo, "overconfidence, arrogance, bureaucracy and lack of responsiveness to clients."
In 1989, shortly after WPP acquired Ogilvy & Mather Worldwide in a highly publicized, hostile takeover, the new parent dropped approximately 50 employees. The cuts also took place in the financial and administrative departments and were said to involve jobs that overlapped with those at WPP. The O&M layoffs were also attributed to the loss of client Kraft Foods' Maxwell House to D'Arcy Masius Benton & Bowles, an account O&M eventually won back.
Separately, Michael Webster, Y&R's Detroit president, has left the agency.