Advertising Agency Merger Layoffs Lose Sting in Hot Economy

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Just as the global landscape has transformed the way ad agencies work and compete, the economy has reshaped employees' attitudes about job security.

Over the past three months, six ad agencies have announced mergers, citing a need to compete more effectively on the global stage. The mergers married Foote, Cone & Belding and Bozell Worldwide; Ammirati Puris Lintas and Lowe & Partners Worldwide; and MacManus Group and Leo Group. In each case, at least some layoffs are inevitable.

At newly created FCB Worldwide, 4% of the New York office's positions were recently eliminated to reduce staffing costs. The agency insists the cuts had nothing to do with its merger with Bozell. But the merger did cause nine people, or 1% of Bozell's New York staff, to be dismissed in October.

Not as intimidating

The prospect of job elimination, however, isn't as intimidating as it once was. While the possibility of layoffs still sends shivers through Madison Avenue spines, these days they are seldom accompanied by complete despair-thanks to a tight labor market and a strong economy.

One executive recently laid off at FCB said "I've had more interviews than I can keep straight. It looks like I will have a choice rather than taking the first thing that comes my way."

At least for the near term, this optimistic view is expected to linger. A recent survey by Manpower, the temporary staffing company, found that 24% of 16,000 businesses polled say they plan to hire more workers in the first quarter. In the services sector alone, 25% of employers plan to add workers compared with 23% a year ago. That 25% is the highest since the first quarter of 1990 when 26% of employers said they planned to hire.

"It's never a good time to be laid off. However, it is, from a labor point of view, a great time to be looking for a job," said Lisa Morgen Barrientos, information specialist at Manpower. She cited such factors as the booming economy and the rapidly growing information technology and e-commerce sectors as reasons.


Internet companies have certainly cushioned the blow for victims of staff slashings. Not only are Web-related startups hiring, job search Web sites are helping empower employees. Sites such as and, which didn't exist a decade ago, offer alternatives to calling headhunters and mailing resumes.

Steve Gundersen, president-CEO of global executive search company Gundersen Partners, said while the number of candidates has increased, job opportunities have kept pace.

"So many of the potential [job] candidates are going to this new [Web] pool, which is growing at lightning speed," he said.

Tom Rosenwald, partner at executive search company Heidrick & Struggles, said there's also a demand for people with global experience.

"There's a tremendous demand for good people, especially on global accounts. But like anything else, good people will get good jobs," he said.

Some employees have taken matters into their own hands by shopping their resumes even before layoffs are announced. One New York agency human-resource manager said she received a slew of resumes from Lowe and Ammirati Puris Lintas employees well before any possibility of layoffs had been discussed.

Because the familiar lament from ad agencies is the lack of talent, the potential layoffs could actually be a boon. Employees with several years of experience who are hit by layoffs can find themselves in an enviable spot.

In turn, agencies that need talent could have a bigger pool to choose from.

"We are in a very tight labor market, period. Even finding bodies to flip hamburgers is a tough thing. There has never been a whole pile of great people in any industry, and with the Internet explosion and other alternatives, finding great people is especially difficult," said Brad Brinegar, president-CEO, Lowe Lintas & Partners Worldwide, Chicago.

Consultant David Beals at Jones-Lundin Associates, Chicago, said: "Ad agencies don't pay nearly as much as e-commerce or the consulting companies. The best and brightest coming out of big grad schools are finding big bucks outside of the ad world."

Add that competition to the lowest unemployment rate in 30 years, and the effect is being felt on agency wallets, via salary demands.


Veteran recruiter Amy Burack, president of the Chicago-based recruiter of the same name, said, "I think that some people are being paid in new jobs more than they are worth. Employers are afraid of losing people, so they are paying them more than they are worth."

Still, even with a good economy, pounding the pavement isn't something anyone would choose to do.

"Everything is so good, but with all the mega-mergers this will continue to happen," the former FCB executive said. "The job market is not as tough as it was 10 years ago, but it still sucks when it happens to you."

Contributing: Hillary Chura.

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