The dismissal of 15 Mullen/LHC employees last week signaled a major reorganization of an agency that has struggled since its merger with Mullen earlier this year.
"We asked ourselves, 'Isn't there a smarter way to organize this agency?' " said Mullen CEO Joe Grimaldi.
The move represents Grimaldi's most aggressive attempt to reverse a series of client losses triggered, sources insisted, by IPG's forced merger of the Winston-Salem, N.C., shop into the Wenham, Mass., agency last winter.
"This is more a strategic and tactical decision than a layoff," said one former LHC executive. "It's a painful move, but one that may ultimately ensure survival."
Since January, Hanes, Alabama Power and Thomasville Furniture have exited LHC/Mullen, accounting for an estimated $23 million loss in projected billings. In addition, Midway Airlines filed for Chapter 11 bankruptcy protection, and Sealy Mattresses, sources said, has cut back spending.
In 2000, Long Hayme Carr's pre-merger annual billings totaled $352 million.
The layoffs, which follow a 30-person cutback last summer, affect the account, media and creative departments. Brad Bennett, senior vice president and director of marketing, was among those let go.
As the reorganization is laid out, traditional agency departments such as creative and media will give way to multi-disciplinary, client-centric "brand initiative" groups.
Account planning functions will be reorganized into a proactive Brand Innovation Center to better track and incorporate trends and other marketplace developments into strategic thinking.
The media department will be renamed the Brand Channels Group. An increased emphasis on analysis and impact is its goal.
The reorganization, sources said, is overdue.
"The importance of integration has grown dramatically," said Grimaldi. "At the end of the day, clients want smart creative solutions. This could be the model for all of Mullen."