Modem Media is closing its New York office and is downsizing its global workforce of 616 by seven percent. The Manhattan office's remaining staffers, as well as clients Delta Airlines and Enterprise Rent-A-Car, will be consolidated at the Norwalk, Conn. headquarters.
"We are taking the necessary steps to adjust the structure and mix of our internal operations in light of the dramatic economic slowdown," said Marc Particelli, Modem Media CEO, in a statement. "For the balance of this year, we will take the necessary actions to ensure that we maintain our financial health."
As a result of these actions, the i-shop will absorb a one-time pre-tax charge of $8 million, of which half will be recorded in the third quarter. In turn, the agency is expected to realize $2 million in pre-tax savings in the fourth quarter and $11 million in pre-tax savings annually.
Additionally, the i-shop projected that revenue for the quarter ending Sept. 30 will be down $2-3 million from revenue of $26.1 million in the second quarter.
This marks the third round of layoffs for Modem Media this year. Earlier this year, the agency slashed 160 employees and closed its Toyko office.