Madwell furloughs more than 20% of employees following Verizon account loss

Madwell furloughed around 30 employees today, just one day after Ad Age reported that the agency had lost one of its top clients, Verizon. Madwell declined to confirm an exact number, but a spokesman confirmed that the agency “furloughed a significant number of Madwellians.” A source familiar with the situation said that around 30 employees were impacted. Read Madwell’s full statement below: “Due to a fraudulently obtained loan from Bank of America as well as other unlawful actions by our former CEO, Madwell has been on shaky fiscal ground for 24 months. This has been compounded by his recent foray into the press, resulting in further damage to Madwell in the marketplace. Consequently, in order to preserve operational viability, we have furloughed a significant number of Madwellians. We continue to affirm our obligations to pay every dollar owed to our employees. Our hope is to continue as a going concern so we can provide remuneration to the many small businesses and individuals who are our creditors. This will require cooperation from our largest one. Madwell’s priority continues to be limiting further impact on our people and our clients.” Madwell’s former CEO David Eisenman co-founded the agency with its current CEO, Chris Sojka. “It’s disappointing that Chris Sojka continues to deflect blame for the financial collapse he caused, which is well documented in the press,” Eisenman said in a statement after this story was published. “His false accusations are directly contradicted by both his own public statements and the factual record. I truly feel for every employee and vendor who hasn’t been paid as a result of his reckless behavior and spending, and I hope they are somehow made whole.” The agency’s current headcount wasn’t immediately known, and it declined to provide a specific number. Last year, Madwell stated that it had more than 130 employees, which would indicate it has furloughed roughly 23% of its staff. The agency worked on Verizon’s Visible business. In a memo sent to staff yesterday, Sojka stated that the loss would “remove 8 figures from Madwell’s annual projections instantly.” Before the account loss, Madwell had been experiencing financial struggles that led to delayed payments for employees, vendors, and office rent. Other clients Madwell has worked with recently include e.l.f. Beauty, OpenText and Ozium. E.l.f. Beauty previously declined to comment. Attempts to reach other clients about their current status with the agency have been unsuccessful. Correction: This story has been updated to reflect furloughs occurred and to include the agency’s full statement.

Madwell furloughs more than 20% of employees following Verizon account loss

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