DDB on Monday began laying off 8 percent to 10 percent of its 450 New York staffers and 28 more in Chicago.
The across-the-board reductions began in the morning when department heads in New York called in affected employees to break the bad news.
An agency spokeswoman said an exact number had not been determined, and dismissals were continuing throughout the day. "It will probably be less than 10 percent," the she said, citing "a general softening of the economic climate across the country."
Two of the New York agency's long-time accounts -- Michelin ($35 million) and Dial ($20 million) -- went into review this year, and it resigned Lockheed Martin's $15 million account. But in almost the same period the agency has won an estimated $355 million in business from such clients as Philips electronics ($150 million), Hasbro ($85 million), Merck ($90 million), the American Stock Exchange ($20 million), and Hershey ($10 million).
"It's outrageous," said one source, adding that the staff at large was not notified. "People are just going up to each other and saying goodbye."
Meanwhile, DDB in Chicago blamed its staff cutting -- 3.5 percent of 800 employees -- on the economy and the recent loss of General Mills and Energizer e2 accounts, together worth $170 million in billings.
"A reduction in ad spending by our current clients" prompted the cuts, a representative said.
In May, General Mills consolidated its $120 million account with Campbell Mithun in Minneapolis and Saatchi & Saatchi in New York?severing its 39-year relationship with DDB. At the time, Alan Pilkington, DDB's chairman and president of North America and Latin America, said he expected no layoffs and cited the agency's new $200 million Dell Computer account. But last week's loss of the $50 million Energizer e2 account to TBWA\ Chiat \Day in Play del Rey, Calif., and cutbacks in current client spending led to the lay offs, sources said.