Publicis Groupe undergoes furloughs, staff and salary cuts across its agencies
Publicis Groupe implemented staff cuts, furloughs and salary reductions last week across various of its U.S. agencies and several people close to the business tell Ad Age that employees are bracing for more layoffs this week.
Those people said Epsilon, Spark Foundry, Hawkeye and Arc Worldwide were among the agencies so far affected. Last week, Ad Age reported that BBH cut 20 percent of U.S. staff. Publicis Sapient, Digitas, and Rokkan have also cut staff, according to Business Insider, which first reported news of the layoffs.
Publicis declined to comment, but one person close to the business claimed that less than one percent of U.S. staff was cut last week. The person said the layoffs were "isolated agency measures" versus holding company-wide and that many agencies did not undergo any layoffs.
But several other people close to the matter said cost-cutting measures including furloughs and salary cuts were carried out across the holding company.
People close to the business said Publicis performed cuts even across portions of its business that are thriving. The holding company's CRM company Hawkeye, which represents most of the old Epsilon agency staff, was asked to do “a bit of trimming” even though revenue for that business is up significantly year-over-year, according to several insiders familiar with the matter. More cuts are still underway, the people said, which are slated to occur by the end of the week.
The cuts within Hawkeye occurred within the local and user experience groups, the people said. Local teams focus on marketing for clients such as 24-Hour Fitness and the San Diego Zoo, while user experience creates user flows for campaigns and web projects.
Ron Magliocco, a senior VP with Epsilon who was part of the Arc Worldwide—which focuses on retail and has clients such as CVS Pharmacy, Coca Cola, Intel and MillerCoors—was perhaps the most senior-level person let go, Ad Age learned.
In the first few months after the coronavirus pandemic caused government shutdowns in the U.S. and abroad, Publicis Groupe had avoided layoffs while rival holding companies, including WPP, Omnicom Group, Dentsu Aegis Network, Interpublic Group of Cos. and MDC Partners all confirmed staff cuts and furloughs across their businesses and agencies.
In an interview with Ad Age in April, following the holding company's release of its first quarter earnings, Publicis Groupe Chairman-CEO Arthur Sadoun confirmed there had not yet been layoffs. At that time, Publicis' cost-cutting measures had included salary cuts, a global hiring freeze and freelance budget cuts. Sadoun did tell Ad Age that cost planning had gone from a global holding company-led initiative into the hands of local leaders, and that "leveraging resources to protect our people" was its top priority.
Other U.S. agencies that have reported layoffs thus far include WPP's GroupM and Grey; Johannes Leonardo; Interpublic Group of Cos.' R/GA and MullenLowe; VaynerMedia; MDC's CPB; IPG's McCann; Omnicom's TBWA, Zimmerman, DDB and BBDO, among others.