R/GA is closing its current spacious Hudson Yards office space in New York City as well as its current office space in downtown San Francisco as part of a larger structuring under CEO Sean Lyons.
Multiple sources confirmed to Adweek that Lyons told the agency the news via email Tuesday night.
As part of the restructuring, R/GA is moving away from its city model in the U.S. and instead implementing a country model with five disciplines powering the business. With the emphasis away from cities, R/GA, in partnership with IPG, is opting out of its leases in New York and San Francisco, Lyons wrote in the email obtained by Adweek.
“Today, 45% of our US staff live far from our offices, and 80% of our project teams bring together talent from more than one location,” Lyons wrote in the email. “The ability to bring talent together from everywhere is the backbone of our Distributed Creativity model. Now we need the infrastructure that supports it.”
Lyons noted in the email that currently only about 40 employees a day, plus a few clients, use the “cavernous” office on a daily basis. Lyons said that the agency will eventually reopen a smaller hub in New York in 2023. With employees all over the country, the agency will consider other physical hubs in the U.S. where employees are concentrated or near clients.
“We are increasing our investment in travel so we can bring teams together in our physical locations, or wherever groups of R/GA people are based. (A bar bill in Atlanta is a better use of budget than an empty room in Hudson Yards.),” Lyons wrote.
The current New York and San Francisco offices will close on Dec. 23. The New York office, which first opened in 2016, was the subject of Workplace: The Connected Space Documentary. For the film, Gary Hustwit explored the spacious 10,000-square-foot office on 10th Avenue and 33rd Street that originally housed 800 employees.
The restructuring first rolled out in late October, according to Ad Age. It will cover staffing, creative practices, office structure and R/GA’s go-to-market strategy under the term “distributed creativity.” The restructuring was apparently planned before R/GA reported losses of up to $10 million this year from crypto and NFT-related work, according to the story.
Part of that restructuring means a reduction of staff. Multiple sources told Adweek the agency recently laid off a number of employees. A previous round of layoffs earlier this year reduced the New York staff by 5%.
Additionally, Robin Forbes took on the role of global chief client officer. Forbes will play a key role with the roll out of R/GA’s new distributed creativity model. He was previously managing director of the brand design and consulting practice.
“With R/GA rolling out its new model built on our creative practices, I’ve been looking for the right person to take on the global chief client officer role. I am lucky to have that person at R/GA. Robin has been instrumental in leading some of our largest and most successful client relationships,” said Lyons in a statement.
R/GA’s global CFO Tania Secor is also stepping down at the end of the year to pursue another opportunity.
The new country model includes a new structure that will encompass five practices: Products + Experiences, Connected Communications, Brand Design + Consulting, Media + Connections and Brand Relationship Design.
Lyons said the new structure will allow the agency to be more nimble and better serve its clients, adding that many employees’ roles will change as the client base changes, especially as the innovation client base in crypto and other areas have dwindled.
Lyons also noted the agency is still working through the remaining management changes and practice placements, and anticipated those changes will be complete by the end of the year.
“Over the last 45 years we‘ve been known to change our model ahead of the industry but we know radical change is difficult and this means not everyone will fit into this model,” Lyons told Adweek earlier this month, during an earlier round of staff cuts. “Our Distributed Creativity model will be the standard for a post pandemic creative company. It embraces global talent across multiple time zones and mean we can be faster, better, and less expensive for clients.”