Grey New York is cutting 45-60 people, or about 4 percent of its staff of 1,100, with the layoffs taking effect in January.
While the WPP agency has been on a new business run this year, winning accounts like Gillette’s global creative, it also lost Energizer personal care products because of conflicts with Gillette and resigned E*Trade after the arrival of a new CMO who put the account into review.
In addition, the agency’s client Radio Shack, which was spending about $200 million when Grey won the business last year, is having financial difficulties, per sources, and has drastically cut back its marketing budget. Sargento, the Plymouth, Wisconsin cheese company, has also informed the agency, which won the account in 2009, that it will be leaving in search of a local shop in the new year.
Most of the staff cuts are related to the loss of Energizer, for which Grey handled brands like Banana Boat and Hawaiian Tropic sunscreens; Playtex Tampons and Fresh + Sexy Wipes. That business moved to WPP corporate sibling JWT and Grey is said to be trying to place some of the laid-off staffers there.
By some estimates Grey has hired 350 people this year, including around 94 that were added to the creative department. The current staff cuts also reflect the agency’s need to invest in building its digital resources. When Tor Myhren, recently named global chief creative officer, joined Grey New York as CCO in 2007, the agency had fewer than a dozen employees working on digital. He has said the office now employs 180 digital staffers.