SicolaMartin has laid off 25 employees, more than 20 percent of its workforce.
The staff cutbacks at the Austin, Texas, agency were linked to a decline in the number of onetime branding projects that the shop typically performs for small and midsize companies.
"The economy hasn't picked up right away, and the slowdown in our second tier has put a strain on business," said Pete Hayes, agency vice president of business development.
An exclusively high-tech agency, SicolaMartin had until now avoided taking a hit along with other specialists tied to this sector. Mainstay clients such as Citrix, Novell and Compaq actually increased their spending with the agency.
"They end up laying off people and you have to pick up more of their marketing duties," explained Hayes. While other agencies have shed employees, "we thought we were going to be the exception."
SicolaMartin's layoffs were spread across all departments. Agency representatives declined comment on the nature of employee severance terms.
The agency now seems unlikely to match last year's phenomenal revenue growth of 95 percent. That figure made SicolaMartin the leading earner in the Southwest, placing it for the first time in the ranks of the region's top 10 agencies.
SicolaMartin was acquired earlier this year by Young & Rubicam Advertising.