Omnicom Group Chairman-CEO John Wren warned employees in an all-staff memo obtained by Ad Age that furloughs and staff reductions will be carried out “across many of our agencies.”

One person close to the matter told Ad Age that layoffs and furloughs are expected to start this week.

Wren also said in the memo that he will be waiving his entire salary through the end of September and Omnicom’s executive leadership team, “including our Network and Practice Area CEOs, are reducing their salaries by a third.”

“Since my last note to you, we have solidified some of the internal measures to adjust our business to meet the changing needs of our clients,” Wren said in the email. “Regrettably, this will include furloughs and staff reductions across many of our agencies. We are doing everything we can to limit staff reductions, and to take care of those who are affected.”

Wren noted, “Where possible, our agencies will use furloughs rather than permanent reductions, so we can bring people back if, and when, conditions improve and client demand recovers.”

He said that Omnicom agencies—which include DDB, TBWA, BBDO, PHD and Omnicom Media Group—will participate in various global government subsidy programs “to reduce the number of permanent staff reductions we need to make.” The holding company will also work to move people to growing areas of the business, like Omnicom Health Group, rather than furlough or cut staff, according to the memo.

Wren said, "with few exceptions," the company has frozen all new hires and salaries and reduced the number of freelancers it employs. "We are eliminating discretionary costs and capital expenditures, wherever possible, including participation in award shows and industry events," he said.

"Unfortunately, COVID-19 has had a profound impact on the economy, on our clients’ businesses, and in turn, on ours," Wren said. "While we hope for a swift recovery, we have to respond quickly to the reality of the moment, to ensure the sustainability of our business and our ability to continue to provide our clients with outstanding service."

The decision follows similar action taken at Dentsu Aegis Network, which confirmed on Monday that it implemented salary reductions and furloughs across the holding company and its individual agencies, which include 360i, mcgarrybowen, Carat, Isobar and iProspect.

Wren's memo in full:

As the impact of COVID-19 continues to evolve, we are focused on protecting the safety and well-being of our people, continuing to serve our clients and preserving the strength of our business.

I have personally heard from clients around the globe just how much they value the work you are doing in their time of need. Thank you for everything you are doing, despite all the challenges. 

Unfortunately, COVID-19 has had a profound impact on the economy, on our clients’ businesses, and in turn, on ours. While we hope for a swift recovery, we have to respond quickly to the reality of the moment, to ensure the sustainability of our business and our ability to continue to provide our clients with outstanding service.

Since my last note to you, we have solidified some of the internal measures to adjust our business to meet the changing needs of our clients. Regrettably, this will include furloughs and staff reductions across many of our agencies. We are doing everything we can to limit staff reductions, and to take care of those who are affected.

• Where possible, our agencies will use furloughs rather than permanent reductions, so we can bring people back if, and when, conditions improve and client demand recovers.

• Our agencies will participate in government subsidy programs around the world to reduce the number of permanent staff reductions we need to make.

• We have expanded coverage in our U.S. health benefit plans for those affected by COVID-19.

• We are actively looking to move people into areas of our business that are growing, such as Omnicom Health Group.

• Omnicom’s executive leadership team, including our Network and Practice Area CEOs, are reducing their salaries by a third, and I am waiving 100% of my salary, through the end of September.

• With few exceptions, we have stopped all new hires, frozen salaries, and reduced the number of freelancers we use.

• We are eliminating discretionary costs and capital expenditures, wherever possible, including participation in award shows and industry events.

• Lastly, we have suspended our share repurchase program, have strengthened our liquidity position through new financings, and are conserving cash wherever possible.

You are the heart of our business and that makes these actions extremely difficult. We have survived crises before. Our people and our company have shown tremendous grit and resilience and we will come out of this stronger.  

Thank you for your hard work and commitment during this difficult time.  

Stay home. Stay safe.

John