Temerlin McClain last Thursday informed employees of plans to cut staffing by 20 percent, about 100 people.
The layoffs, as expected [Adweek, April 30], are a prelude to the merger of McCann-Erickson's Dallas and Houston offices under Temerlin. The move is expected to be finalized this summer when McCann parent company Interpublic Group completes its pending acquisition of True North Communications. True North is Temerlin's corporate parent.
"It's never an easy decision to reduce employees," Temerlin chief executive officer Dennis McClain said. "However, we've had to reduce our staffing levels given the softening in overall client spending, especially in the technology and dot-com sectors, which have fueled our growth in the past year."
The agency lost some revenue in the last two months as Verizon consolidated its DSL account at Lowe Lintas, and as DDB New York picked up the international portion of its Nortel account through a business service agreement.
A source said the staff reductions pave the way for an expanded Temerlin to take on a larger role as the local affiliate of the McCann-Erickson network.
Retaining the Temerlin McClain name, the new agency will be led by Dennis McClain. McCann's employees—115 in Dallas and 20 in Houston—will move into Temerlin's facility in Irving, Texas.
McClain declined to comment on the future of a McCann-Temerlin alliance.
"The deal with IPG is not scheduled to close for several weeks. It's entirely too early to speculate on integration possibilities," he said.
IPG executive vice president of planning and business development Barry Linsky responded similarly.
"Nothing has been decided whatsoever," Linsky said. "We can't do anything with any of the True North operations in advance of the conclusion of the transaction. We have to remain competitors [with Temerlin and other True North units] until the deal goes through."