Cordiant Communications Group predicted on Monday that underlying revenues for 2001 will decline nine percent, as opposed to a September estimate of five percent. As a result, the London-based parent company of Bates, 141 Worldwide, and Fitch, among others, said it plans to reduce its workforce of 10,000 by 1,100 or 11 percent across its advertising and marketing communications businesses.
Cordiant is expected to incur a one-time charge of nearly $36 million due to severance-related costs and other cost-cutting initiatives.
To save money, Cordiant also plans to merge or consolidate a number of its operating units around the world and close or re-organize certain loss-making operations, the company said. Additionally, Cordiant's interactive business, CCG.XM, will become a part of integrated marketing company,141 Worldwide.
The reduction in media spending and project-based business coupled with cancellations of planned campaigns were factors that led to the revised forecast. Due to the cost-cutting measures, Cordiant projects that it will realize an incremental cost savings of about $43 million in 2002.