On the back of a lackluster year, Bartle Bogle Hegarty is reducing the size of its New York office in a major round of layoffs that will also see the departure of the office's CEO.
BBH's group chief executive, Gwyn Jones, flew on Thursday from London to the U.S. to personally deliver the tough news to the agency's 120 employees. It is understood that as much as 25% to 30% of the agency will be eliminated in the coming days.
As part of the changes, CEO Greg Andersen is stepping down at the company and will pursue other opportunities. Mr. Andersen had been with the shop since 2006, after serving in a top planning job at Interpublic Group of Cos.' Lowe . In his time at BBH, he established BBH's engagement-planning department, moved up to become managing director, then was named New York office CEO in February 2010 amid a restructure of the shop that was intended to free up then-CEO Emma Cookson's time to concentrate on the shop's Cadillac account. But those moves proved futile since former General Motors CMO Joel Ewanick yanked the account from BBH in a matter of months and handed it to sibling shop Fallon .
Mr. Jones explained to Ad Age that the current round of layoffs is in light of an "up and down" time for the agency in New York. He noted that this year's loss of the Sprite business -- a move which happened in April when the brand's parent Coca-Cola chose to shift those duties to Leo Burnett -- particularly dealt a significant blow to the office's revenue.
But even more so than any account losses, he said, BBH management became concerned about the cutbacks in ad spending that they're seeing existing clients making. He did not identify which ones.
Other clients handled by BBH, New York, include Google (which as of last year was the office's biggest account), Cole Haan, the Weather Channel and work for the agency's global Axe business.
"More recently we have been exposed to real volatility on existing client revenue," Mr. Jones said. "In that context, we thought, we need to react to the business, not just now but on an ongoing sense."
The decision to reduce the size of the New York operation comes on the heels of BBH's founders, John Hegarty and Nigel Bogle, passing the torch to Mr. Jones amid the sale of the remaining 51% stake in the agency to Publicis Groupe . The French holding company had held 49% of the agency since 2002.
While Publicis Groupe CEO Maurice Levy had been apprised of the staff reductions in New York, it was not a directive from the holding company chief, Mr. Jones said.
Mr. Andersen is exiting the agency effective immediately, and no replacement is being named. His duties are being taken over by chairman and longtime office head Emma Cookson. She will be assisted in overseeing the shop by BBH New York Chief Creative Officer John Patroulis.
Said Mr. Jones in reference to the layoffs: "It's not something anybody likes to do. We're not a huge agency, and are quite a tight-knit family, so you want to do those things less. But this is advertising, and we live in uncertain times. And I believe we're on the road to finding ourselves and strengthening the creative product."
