BOSTON Havas-owned Arnold will begin laying off staff tomorrow as it prepares to lose its largest account, Volkswagen of America, which last month said it would shift its estimated $400 million account to MDC Partners' Crispin Porter + Bogusky.
Sources said the agency would trim between 50 and 80 employees from its Boston headquarters, or 10-15 percent of the staff at that location.
The final number will depend on the agency's performance in ongoing reviews for LensCrafters and Liberty Mutual, sources said.
Arnold is winding down on the VW business, and the move to CP+B in Miami becomes final in early December.
The layoffs will cut across all departments, but come mainly from among the 130 staffers who worked on VW, sources said.
VW accounted for about 10 percent of Arnold's estimated 2004 overall revenue of $227 million.
An Arnold representative declined comment.
The layoffs were inevitable, according to agency CEO Ed Eskandarian, who has said jobs would be eliminated, but has declined to discuss specifics [Adweek Online Sept. 6].
Managing partner and group account director Jon Castle, who oversaw VW at Arnold for much of its 10-year run at the agency, is likely to be among the most senior executive leaving as a result of the account loss.
Castle, an 18-year agency veteran, confirmed Tuesday in a brief phone conversation that he is leaving at year's end, but he declined to discuss specifics.
"Arnold's a great place. I love Arnold," Castle said. "But my family and I have made this decision."
Recent high-profile new-business additions, such as the $250 million RadioShack account (added in May) and the $80 million-plus Hershey assignment (added last week), mitigated the layoffs somewhat, sources said, as some VW staffers were moved onto those accounts.
Arnold is not defending the $40 million-plus Goodyear business, which is currently in play, but is a finalist for the $60 million LensCrafters and $50 million Liberty Mutual accounts.
—with David Gianatasio
This story updates an item posted earlier today with revised layoff numbers.