Internal Memo: IPG CEO Michael Roth Addresses Layoffs, Other Cost-Cutting Measures Across IPG Agencies

By Erik Oster Comment

IPG CEO Michael Roth sent a memo across all agencies yesterday, addressing the holding company’s various cost-cutting measures and acknowledging that individual agencies would need to make difficult decisions around staffing reductions. It came on the heels of the news that MullenLowe went through a round of layoffs across its Boston, New York and Los Angeles offices last week.

In the memo, Roth acknowledges that the past week has been “a particularly difficult one” for many at IPG “as the human toll of the COVID-19 crisis continues to grow,” including “some who have suffered personal and painful losses of loved ones, family members or colleagues.”

“Our hearts go out to everyone touched by such losses,” Roth wrote.

In that context, Roth said he was inspired to see IPG agencies “continue to produce work in partnership with their clients that celebrates the true heroes—the medical professionals, transit employees, grocery and pharmacy workers, delivery people and more—and the crucial services they are providing.

He added that IPG agencies are not only “creating new work for existing clients to help them meet business goals” but also winning new business “in many parts of the world.”

After thanking IPG employees for their continued contributions, Roth acknowledges a need “to be clear-eyed about the road ahead,” given the “significant economic impact” of the coronavirus pandemic, which is “causing businesses and consumers to decrease spending, including clients in especially hard-hit sectors.”

Given that reality, Roth said IPG and its agencies have to adjust to a new economic reality, with the resulting pressures on its revenues, meaning “we must explore a range of options to reduce expenses, as we face a business environment without precedent.”

“The steps being taken across our companies include deferred merit increases, freezes on hiring and temporary labor, major cuts in nonessential spending, furloughs in markets where that option is available, salary cuts and, unfortunately, reductions in staffing levels,” Roth acknowledges, stating that such measures have already been taken at the IPG corporate level, including voluntary salary reductions for the senior leadership team.

“Please know that our goal is to take all these other actions in order to minimize the impact on our people. These are steps to protect our business, protect as many jobs as we can, and to ensure we can fully participate in a recovery when the time comes and economic growth returns,” Roth writes, adding that IPG remains committed to supporting its people and its clients. He concludes by wishing employees and their families health and safety, and thanking them for their support.

Here’s the memo in full:

This past week has been a particularly difficult one for many of us as the human toll of the COVID-19 crisis continues to grow. Some of us have suffered personal and painful losses of loved ones, family members or colleagues. Our hearts go out to everyone touched by such losses.

In this context, it’s inspiring to see our agencies continue to produce work in partnership with their clients that celebrates the true heroes—the medical professionals, transit employees, grocery and pharmacy workers, delivery people and more—and the crucial services they are providing. Our companies are also creating new work for existing clients to help them meet business goals, and we continue to win new business in many parts of our world.

In fact, I am hearing reports from all over our company and from all around the globe about our people who are working remotely yet feeling more connected than ever with each other, with client teams and with their communities. As we navigate these unprecedented times together, we have the opportunity to strengthen our relationships with our clients. I thank each of you for continuing to contribute so much to IPG, in addition to managing the many personal challenges each of us faces.

At the same time, we want to be clear-eyed about the road ahead. As the current health crisis is constantly evolving, it is having significant economic impact that is causing businesses and consumers to decrease spending, including clients in especially hard-hit sectors. We, too, have to adjust to this economic reality. The resulting pressure on our revenue base means we must explore a range of options to reduce expenses, as we face a business environment without precedent.

The steps being taken across our companies include deferred merit increases, freezes on hiring and temporary labor, major cuts in nonessential spending, furloughs in markets where that option is available, salary cuts and, unfortunately, reductions in staffing levels. The corporate group at IPG has also taken these steps, including voluntary salary reductions for our senior management team. Looking across the IPG portfolio, our companies have differing business models, client mixes and geographies, and as such, the impact of the crisis varies, which means the actions taken at each company will vary, too. Please know that our goal is to take all these other actions in order to minimize the impact on our people. These are steps to protect our business, protect as many jobs as we can, and to ensure we can fully participate in a recovery when the time comes and economic growth returns.

Through it all, we remain committed to providing a high level of support to our people and to our clients during this unprecedented time.

We continue to wish each of you and your families good health and safety. As always, I thank you for your continued support and dedication.

Michael

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