In the wake of its estimated $3.2 billion General Motors buying account win last week, Publicis Groupe's General Motors Planworks will expand its workforce by more than 50 percent to 300-plus staffers, while it's likely that 100 or more people who had worked on the account at Interpublic Group's GM Mediaworks and LCI units will end up out of work.
Most of the expansion at Planworks will take place in New York, where the agency will establish a national broadcast buying office and in regional offices to be established in Chicago, Los Angeles, Dallas and Atlanta, where GM has its primary field offices.
The Planworks regional offices will handle national TV spot buying, said the agency's president, Dennis Donlin, adding that print and interactive buying will be based at Planworks headquarters in Detroit.
Donlin, who spearheaded the Planworks' GM pitch, said he will get plenty of assistance from sister company Starcom in setting up the buying operation for GM, but once it's established, "it will be completely separate and dedicated" to the automaker.
Planworks will take over the GM business on Oct. 1.
Meanwhile, staffers at IPG's GM Mediaworks and LCI, the national and local media buyers for GM, respectively, are bracing for staff count reductions. IPG would not comment last week, but sources said that between Mediaworks and LCI, some 200 people are dedicated to GM.
Mediaworks is part of a larger entity called The Works that also houses a separate GM-dedicated events and promotions company called GM R*Works, which is unaffected by the decision.
Donlin confirmed that certain people at Mediaworks and LCI may be considered for the expanded Planworks but declined to be more specific. Sources said that Mediaworks staffers who don't get picked up across town will likely be out of a job. Prospects at LCI are a little better because it services IPG clients other than GM. The total staff cut is uncertain at this time but might surpass 100, sources said.
Meanwhile, blame for the GM loss is being placed mostly on the shoulders of Rick Sirvaitus, the recently terminated president of Mediaworks (his successor, John Miles led the pitch on GM). Sources said he failed to establish an effective relationship with Betsy Lazar, who last year succeeded Michael Browner as executive director for media and marketing operations at GM.
GM said it will achieve "efficiencies" under its new contract with Planworks. The $3.2 billion account switch— the largest single account move in ad history—was worth $40 million to $50 million in revenue and $5 million net profit for IPG.