Ogilvy & Mather is slashing staffing in its Los Angeles office due to dramatic spending reductions from a couple of its largest clients.
Effective Feb. 3, the agency is cutting 33 positions across all agency operations, with 15 permanent staffers remaining.
In an internal email, O&M North American chairman John Seifert said the resulting multi-million dollar operating loss, from client spending cuts, was not sustainable under the current operating structure. After the staff reductions, the agency will support clients with remaining staff and other resources from other O&M units, as needed. (Seifert did not identify which clients made the spending reductions.)
Among the advertising clients O&M Los Angeles continues to work for are Nestlé, BP ARCO/ampm and Qualcomm.
Ogilvy’s public relations business in Los Angeles, San Francisco, Sacramento and Denver, along with OgilvyOne’s customer engagement business in San Francisco, will not be impacted by the West Coast staff reduction.
Michael Dobak, previously global managing director on the agency’s IBM account, was promoted to the new Los Angeles-based role of CEO O&M West in July. Seifert, making that announcement, was bullish on the network’s prospects in that region. He cited the culture of innovation and global influences on technology, entertainment, gaming and pop culture as a priority in establishing more of a presence out there. He is still optimistic about the agency’s prospects there and, going forward, sees a new model in L.A. built around social, mobile, content and data.
“We know the consequences of this action will be difficult for our people and our clients, and will do all we can as a network to support them,” Seifert told staffers in his email. “While this is clearly a setback for us, we remain bullish about our future in California and the west. We are committed to redesigning our offering and developing our business for the long term in this dynamic and vital part of the North America region.”