WPP's Ogilvy has laid off 80 employees across nine offices, amounting to 3.7 percent of its U.S. staff, according to an internal memo from Ogilvy Worldwide CEO John Seifert that was obtained by Ad Age.
Seifert also announced that Ogilvy U.S. Chief Creative Officer Leslie Sims would be departing amid a larger restructuring effort to focus on regional leadership, or "location-based leadership teams. Other than Finance and HR, we are eliminating a whole layer of leadership roles designed to manage across multiple USA locations," he said.
An Ogilvy spokesperson declined to comment.
Seifert blamed the layoffs on "a challenging second half in 2019 and a cautious financial outlook for full-year 2020."
"We continue to experience volatility in our diverse client portfolio," Seifert wrote. "Despite important new business wins, we face client budget cuts and pricing pressures; ongoing shifts in the type and mix of work we do; and the dynamics of a project-based business model, which makes full-year forecasting and financial management very challenging."
Seifert thanked Sims for "all that she did over the past year to support our next chapter business agenda, the creative community across the USA … and for her valued partnership among the Worldwide Creative Council."
"Leslie joined us at a critical moment in our transformation journey," he wrote. "She led the development of new creative campaigns on several important client assignments and helped re-energize our new business efforts. I’m deeply grateful for her support and wish her our very best. Leslie is a class act."
Sims was appointed as Ogilvy's U.S. CCO in December 2018. She previously spent nearly four years at WPP's Y&R (now VMLY&R), where she most recently was chief creative officer of North America. Before WPP, Sims spent 16 years at IPG's McCann.
"With new local leadership teams now coming together, I’m very confident that we have the right growth mindset and progressive management approach to getting Ogilvy USA back to stronger business performance by the end of 2020," Seifert concluded in the memo. "It’s always difficult to part ways with people who have given much to the company and Ogilvy brand, some for many years. Please join me in sharing with all those impacted by this action our deepest thanks."
The layoffs come amid widespread challenges, including client budget cuts and shifts to in-housing and project work, facing many traditional agencies. On Monday, creative agency Arnold Worldwide, part of Havas, laid off 5 percent of its staff in Boston.
In a recent episode of Ad Age Ad Lib, WPP CEO Mark Read acknowledged the pressures unique to the holding company, as well as those affecting the larger industry. "If I have one frustration, it’s still somehow that we’re seen as an old-fashioned advertising agency that’s being disrupted by Google and Facebook,” he said.
Read said 2020 would see WPP focusing on returning to growth in North America and on championing a new creative strategy to sustain the company for the future, noting that creativity, across its various brands, has not been WPP's strong suit.