GEARING DOWN: FCB Trims Staff at Santa Ana Office As Client Mazda Cuts Ad Budget By Shelly Garci

Foote, Cone & Belding, facing shrinking revenues as Mazda Motor of America, the only client at its Santa Ana, Calif.

The layoffs amount to 10% of the staff at the Orange County office, which had numbered 250.
‘We’ve had to take these steps because of the economy, Mazda’s decision to downsize and their reallocation of marketing dollars,’ said Bill Hagelstein, executive vp/gm at FCB/Santa Ana.
Mazda, which had increased its factory ad budget last year to an estimated $175-200 million to support a string of new model launches, will cut back on those levels in 1993 and eliminate some efforts like sports marketing and motorsports events, according to a spokesperson. ‘The budget won’t be what it was last year,’ the spokesperson said.
Officials at Mazda were not available to comment further last week, but it’s believed that the company will likely trim $10-20 million from its ad budget. Some marketing dollars may be transferred to incentive programs and other regional marketing efforts, other sources close to the company said.
Among the executives affected by the layoffs at FCB are Bryan Birch, senior vp/co-creative director; Dennis Blum, vp/associate creative director; and Tom Dunsmuir, vp/senior copywriter.
Hagelstein, who noted that the Santa Ana office had added about 100 employees over the last four years as the Mazda account has mushroomed, said that most of the cutbacks were made in creative and account management. FCB’s L.A. office just won the MGM media account, but the positions eliminated in Santa Ana wouldn’t easily translate to the needs of the new MGM business. ‘The majority of the 25 will not have a home,’ Hagelstein said.
A worldwide sales slump at Mazda, and a 65% net income plunge to $69.8 million, in part led a trade magazine last month to report that FCB would lose the account.
In a letter to the editor of that magazine, Inside Media, Mazda U.S. president Kazuo Sonoguchi said he was ‘shocked and outraged’ by the story. ‘The assertion by these two writers that Mazda’s relationship with Foote, Cone & Belding has been a ‘long, bumpy ride,’ that is ‘likely to become rockier and could even lead to FCB’s dismissal’ is absolutely groundless.
‘Our partners at Foote, Cone & Belding have served us well for more than 20 years,’ the letter said. ‘And we look forward to continuing that relationship . . . And all of us expect nothing less than an immediate apology and a full retraction.’
Copyright Adweek L.P. (1993)