Leo Burnett USA begins laying off staff

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As expected, Leo Burnett USA, Chicago, began laying off employees Wednesday, executives close to the situation confirmed. The agency will fire nearly 200 people, or about 9% of its full-time work force, which numbers about 2,150. Bob Brennan, president of Leo Burnett Worldwide, earlier said he was "looking at every aspect of the company" for places to trim staff, with the goal of reinvesting in creative, research and technology. Executives close to the company expected the bulk of pink slips to be delivered to staff related to the phaseout of General Motors Corp.'s Oldmobile business and the recently lost Kraft Foods account. However, teams on hot accounts also have been trimmed, according to execs close to Burnett.

Mr. Brennan confirmed the layoffs this afternoon, saying that only the Chicago office of Leo Burnett was affected. "Every department was affected, some much greater than others," he said. He wouldn't provide any specifics about where the cuts were made, citing legal reasons, but he did say that more cutbacks were made in administrative areas. He conceded that Oldmobile and Kraft account changes played a role in the cutbacks, but he emphasized the company was "changing the way it operates."

Mr. Brennan and Brad Brinegar, CEO of Leo Burnett USA will host four town meetings to addresss concerns of all employees tomorrow. The cuts may not be the last.

"I never want to do this again. We never want to do this again, but we can't guarantee we won't," he said. The last layoff of this magnitude was in 1993 when about the same number of people were pinkslipped due to "changing client needs and a push to operate more efficiently in today's economic environment."

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