U.S. ad agencies cut 4,800 jobs in January. That reduced staffing to 186,000, the lowest point since 2014.
BLS reports ad agency employment on a one-month lag, so February figures aren’t yet available. But the uptick in February advertising, public relations and related services staffing suggests that ad agencies were adding jobs last month.
Agencies are watching staffing levels closely. Even before the COVID-induced recession began in February 2020, ad agency employment had trended downward from the record high of 208,800 jobs reached in 2018.
Agency job cuts before and during the coronavirus pandemic aren’t a surprise. Labor is the biggest cost for agencies, and the agency business was grappling with sluggish growth even before the recession.
U.S. ad agency employment tends to peak earlier than the overall U.S. job market in the waning days of a business cycle’s economic expansion before a recession. On the flip side, agencies generally are cautious about adding employees as the economy recovers, resulting in a lag in staffing growth.