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Arnold Cuts Staff by 5%

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BOSTON Havas' Arnold today said it is cutting 40 employees, or about 5 percent of its workforce, across its offices here, in New York and McLean, Va.

Most of the cuts come from the shop's Boston headquarters and several senior staffers are leaving, said agency CEO Fran Kelly.

Those on the way out include ecd, managing partner Jay Williams; evp, brand promotions Beth Rice; and McLean executive director and managing partner Ken Umansky, Kelly said.

In McLean, evp Karen Riordan has been promoted to replace Umansky.

Arnold is "retooling for the future and building to stay ahead of the curve," and the layoffs are designed to gain efficiencies in a complex and quickly changing marketplace, Kelly said.

"All clients are under pressure to do more for less" and passing that along to their agencies, Kelly said, though he maintained that the layoffs are not tied to any specific client losses or budget cutbacks.

Following a tough 2005 that saw Arnold lose Volkswagen of America, its largest account worth an estimated $400 million, the agency has performed fairly well in 2006.

In the past year, the shop has added work from Progressive Direct (worth $150 million), Lee Jeans ($30 million) and Trex ($10 million).

Arnold is currently a finalist for New York City Tourism ($15-20 million) and Pearle Vision ($12 million).

The agency in recent months came up short, however, in several other high-profile reviews, including contests for Heineken, H&R Block and Panasonic.

Other key Arnold clients include American Legacy, Citizens Bank, Fidelity Investments, Hershey, RadioShack and Vonage.