Layoffs Hit Shops on Both Coasts | Adweek
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Layoffs Hit Shops on Both Coasts

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NEW YORK--Uncertainty about the economy and a dearth of new business activity has triggered yet another round of industry layoffs, this time at agencies in San Francisco and New York.

In San Francisco, Goodby, Silverstein & Partners last week cut 30 staff ers, or about 10 percent of its work force, sources said. Earlier, FCB, also San Francisco, laid off 28--about 7 percent of its staff, sources said.

Saatchi & Saatchi in New York, meanwhile, told an estimated 50 staffers they were losing their jobs, an ag ency representative confirmed. That represents about 8 percent of Saatchi's 650 staffers. The cuts were mostly in account services but also included back-office support staff, the rep said.

In each case, the layoffs crossed departments and were due to be lt-tightening. Account losses did not appear to be a factor. But shops are concerned about the prospect of decreased spending by existing clients.

"Everybody is agonizing and saying, "How long can you wait to find out before you find out what your own nu mbers are going to be?" said an executive at a global shop. "You just don't know."

The latest round of layoffs follows similar cutbacks at shops in Chicago (Leo Burnett, DDB, Euro RSCG Tatham, Frankel, Burrell Communications), New York (Young & Rubica m) and Texas (GSD&M, Temerlin McClain and Grey). Shops in Atlanta (Doe-Anderson) and Virginia (The Martin Agency) also have cut staff as a result of client losses (RJR's Winston and Saab, respectively).

Burnett laid off 200 workers in February, blaming loss of business with Oldsmobile and Kraft and a changing marketplace, though sources chalked it up to the economics of a company about to go public. Sources said more layoffs can be expected there, though not on that level.

Tellingly, search consultants also have been affected by the stumbling economy, with fewer searches and more compensation negotiations--a sign of belt-tightening on the clients' part. As one consultant said, "We get real busy with compensation work in a recession."

Internet shops in p articular have been hit hard by layoffs, the latest being Sapient, Cambridge, Mass., and Modem Media, Norwalk, Conn. On Friday, Sapient said it would reduce its global work force by 20 percent, cutting 720 employees and closing its Sydney, Australia, office. A day before, Modem Media said it would cut 10 percent of its work force and close its Tokyo office.

-- with staff reports