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Sources: Ogilvy Group Cuts 10% of Staff

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The Ogilvy Group today cut about 10 percent of its staff across multiple units in response to client spending reductions that exceed the WPP Group shop's new business growth, sources said.

The cut affected the North American offices of Ogilvy & Mather, OgilvyOne and Ogilvy Interactive, according to sources. Some sources estimated the number of layoffs at 300, but others said it was about half that, or roughly 10 percent of the total headcount at those offices, which now stands at roughly 1,500.

An Ogilvy representative declined to comment.

Last year, Ogilvy added global creative duties on Thomson Reuters, customer relationship management duties on Sears and Kmart, global creative and media duties on Stolichnaya vodka and U.S creative duties on Wachovia Corp. But the mortgage-crisis-addled Wachovia subsequently was acquired by Wells Fargo, which decided to keep DDB in Venice, Calif., as its lead agency.

Ogilvy, meanwhile, saw many of its major clients slash spending and shift dollars into disciplines handled by other roster shops. The agency's client list includes IBM, American Express, Kodak, Unilever, Kraft Foods, Lenovo and Morgan Stanley.

In addition, Ogilvy has failed to win pitches for other accounts, including U.S duties on Levi's, which independent Wieden + Kennedy in Portland, Ore., won last month. Ogilvy, which pitched out of its New York and Chicago offices, was among six shops that made presentations to the San Francisco-based client. In 2007, the brand spent nearly $80 million in major measured media, according to TNS Media Intelligence.

The cut comes as Miles Young moves to New York to assume worldwide CEO duties of the group from longtime CEO Shelly Lazarus. Lazarus remains as worldwide chairman. Young previously was chairman of Ogilvy's Asia-Pacific region, working mainly out of Hong Kong.