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CHICAGO ( -- Bcom3 Group's Giant Step, Chicago, is taking a step back and some staffers will be taking a walk.

In the wake of the dot-com fallout, the interactive advertising unit is merging with sister agency Novo, San Francisco, and will take on the Novo name. Giant Step's New York office will combine with its Manhattan Novo sibling shop, and the Chicago office of Giant Step will be rebranded as Novo. Novo offices in Detroit and Los Angeles will continue to operate under the Novo name.

The company has cut 20% to 30% of its combined staff, with the remaining headcount estimated to be between 260 and 280 workers, said a Novo insider.

The move was made to "better align staffing levels with existing workload and projected revenues," said a Bcom3 spokesman. The agency lists Maytag Corp., Philip Morris Cos., Procter & Gamble Co. and Orbitz among its clients.

Kelly Rodriques, founder, chairman and CEO of Novo, will continue as the head of the newly combined company, and Harry Schlough, president and chief operating officer, will continue in the same post. Giant Step President Steve Weinswig will report to Mr. Schlough in a yet-to-be-announced post. Mr. Weinswig became president of Giant Step in May from vice president of client service and business development after Co-founders Adam and Eric Heneghan resigned in January. Giant Step cut 52 positions, about one-fourth of the headcount, in March.

Prior to the merger, Bcom3 had a 40% stake in Novo and 100% ownership of Giant Step, which was originally acquired by Leo Burnett Co. in the mid-1990s.Novo came to Bcom3 as part of N.W. Ayer, when it merged with Ayer's interactive unit Blue Marble ACG in 1999.

According to the Advertising Age Interactive 100, Novo had $36 million in interactive marketing revenue for 2000, and Giant Step had $25.8 million.

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