Interpublic Group of Cos.' R/GA is the latest agency to initiate a round of layoffs and furloughs. An agency spokesperson confirms that the agency laid off 10 percent of its U.S. staff, effective today, and also furloughed some employees, though it is unclear how many. "This was neither an easy, nor a simple decision," said CEO Sean Lyons. "It was important to us to provide all the support we could to those leaving, and are offering everyone at least four weeks of severance, healthcare coverage until the end of the year, and resume writing, interviewing, and networking services."
The R/GA news comes as holding companies WPP, Omnicom Group and MDC Partners all posted shaky first quarter results. For the most part, the earnings offered a pretty bleak outlook for the industry over the next several months.
WPP says despite a “good performance” in February, the holding company’s like-for-like revenue less pass-through costs declined by 7.9 percent in March, when its global agencies began working from home. Overall, WPP’s revenue declined by 3.3 percent in the first quarter. The holding company—which Ad Age learned was recently given access to £600 million ($747 million) in credit under the U.K. government's Covid Corporate Financing Facility—also implemented new cost-cutting measures including a reduction in “headcount in certain areas” and “voluntary salary sacrifice and part-time working.”
Omnicom, which has already carried out furloughs and layoffs across its agencies, warns of further revenue declines in the second quarter and full year but declined to post guidance given the uncertainties surrounding the business right now. Omnicom CEO-Chairman John Wren says that the company expects to continue evaluating the performance of agencies within its portfolio and further cost-cutting measures may be necessary in the process. Wren also managed to throw shade at Wendy Clark during an earnings call for her decision to “move on in the middle of a crisis.” (The former global CEO of DDB Worldwide announced last month she would be leaving to become the global CEO of Dentsu Aegis Network.)
MDC Partners’ stock skyrocketed 41 percent on Wednesday (it's since given up some of that gain) after reporting its first quarter earnings. The holding company posted organic growth of 2 percent—the first time its organic revenue has increased since the third quarter of 2018. Still, MDC is not immune to the adverse impacts of the pandemic and CEO-Chairman Mark Penn warns of organic revenue declines of 10 percent to 15 percent for the full year. MDC Partners’ overall revenue declined 0.3 percent in the first quarter. Penn says the holding company has taken the following cost savings measures so far: salary and hiring freezes; temporary compensation reductions; a “significant cutback” on discretionary spending; reduction in freelance budget; and “some furloughs and headcount reductions.”