Essence Went Through a Round of Furloughs and Layoffs Across North America Last Week

By Erik Oster 

WPP’s Essence went through a round of furloughs and layoffs across its North American offices last week, as well as pay cuts due to reduced workweeks for some employees.

“Since the beginning of the coronavirus outbreak, we’ve been doing everything we can to protect employees and limit the impact on our clients and our business. All companies are being affected by the pandemic in some way and unfortunately the current situation requires us to make further adjustments across our business,” an Essence spokesperson said in a statement.

“This includes introducing shortened workweeks, redeployments and furloughs for some employees, and—where unavoidable—some staff reduction,” the spokesperson explained. “We’re working to support those affected and are deeply grateful for the efforts and commitments of our employees and our clients during this challenging time.”

Those supporting efforts include severance and a benefits extension in line with WPP guidance, with the agency covering Cobra payments for one to two months following the layoffs in the U.S., according to a source with direct knowledge of Essence’s operations. The round of layoffs was preceded by earlier measures taken to prevent or limit the need for staffing reductions, including executive pay reductions and cutting the agency’s 401k matching program, according to this source.

WPP acknowledged the need for further cost-cutting measures in response to Covid-19 in its Q1 earnings report last month, including “voluntary salary sacrifice from over 3,000 senior roles,” moving employees to part-time roles and “some permanent headcount reductions.” As anticipated, the pandemic contributed to a revenue decline for the first three months of 2020.

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