NEW YORK Last week was one of the bleakest in the current economic crisis for the ad industry. In just a matter of days, agencies nationwide made significant reductions to their workforces.

McCann Worldgroup S.F. confirmed it cut 5 percent of its staff, or 40 jobs; BBDO, 10 percent, or 50 positions, at its Troy, Mich., office; PHD is thought to have cut 15 percent of its staff, or 30 staffers; Enfatico, 8 percent or 80-100 people; and The Martin Agency shed 5 percent, or 24 positions. This followed Crispin Porter + Bogusky's layoff of 60 staffers last month, slightly less than 7 percent of its agency, and the Ogilvy Group's cutting of approximately 150 positions, or 10 percent, in January.

These newly unemployed, said recruiters, will need to adjust their expectations to new industry realities -- especially those with traditional backgrounds.

"You can expect a cut in title and pay," said Amy Hoover, an evp at the industry's largest recruitment firm, Talent Zoo. "You're lucky if you can make a lateral move."

Hoover, in fact, said there's been a 5-10 percent decrease in salaries in traditional agencies. But while candidates may have little negotiating clout, she said, they should try for perks like extra vacation time.

And anecdotal evidence suggests that senior execs, even those in demand, know they have less negotiating power for bonuses.

Still, Hoover warned against looking too desperate. Candidates who are willing to take, say, a 35 percent pay cut and a junior-level title may not get the job because they're overqualified, and if they do get it, may not be considered for a more appropriate senior role when it becomes available because the job seeker has devalued his or her credentials.

Because money is still flowing into budgets for online advertising, salaries in that field have remained pretty stable, and hiring is strong relative to traditional shops. (Other specialty niches like retail are also strong, as marketers focus more on point-of-sale in tough times.)



"The Detroit market has been the worst hit for obvious reasons, but New York is not much better," said Hoover. "On the West Coast, there may not have been as many layoffs, but hiring is slim to none."

As in other economic downturns, freelance requests are rising. Jadey Ryndak, Paladin regional manager for Chicago, New York, Los Angeles and Boston, said they've seen a 40 percent increase in contract business over direct hires. "In early 2000, agencies were coming off a period where they were overstaffed -- they were still reeling from the dot-com era," she said. "Now they're leaner. We're seeing such a resurgence in contract because work still needs to be done."

While industry holding companies like WPP and Omnicom have clamped down on hiring, Interpublic Group is still adding employees on an agency-by-agency basis. IPG executive recruiter Brian Brooks said he's never been so busy, with 20 active searches underway. Half are for jobs that have never existed before and Brooks said he's recruiting talent with relevance to digital areas -- like Naked's Yakob Faris, who became McCann's chief technology strategist in December -- or other high-level strategic roles as opposed to day-to-day people with management responsibilities.

"It's not just about how well individual agencies are doing as much as it is about an agency head's perspective about the future," he said. "If an agency believes it needs to change for the future and has the desire for capabilities and skills it doesn't already have, that necessitates recruiting new senior talent with different backgrounds or competencies."

Sadly, that does not bode well for the thousands of agency staffers now on the street who will find it tough to restart their careers as companies begin to hire again.

"With lot of the skills coming on to the market, I have a feeling many [unemployed staffers from traditional backgrounds] are not going to be needed, even when the economy recovers," concluded one observer.