R/GA has laid off 10% of employees across its U.S. offices, according to an agency spokesperson. The agency did not share how many people were impacted. Globally, R/GA employs more than 2,000 people.
The layoffs are effective May 1. All laid-off employees will receive severance pay for at least four weeks and healthcare benefits until the end of this year.
Other cost-cutting measures the IPG-owned agency has taken include 10% pay cuts for executives, reduced work schedules for teams that aren’t client-facing and short-term furloughs for “facilities staff,” or people who help clean and maintain its offices.
“Covid-19 has forced a lot of companies like ours to make these very difficult decisions, but it was important to us to be able to take care of the talented individuals leaving us,” Sean Lyons, global CEO of R/GA, said in a statement. “While some of what we’re doing for our clients has changed, we’re still hard at work, and have found that R/GA’s natural resilience and range have helped us to deliver for those clients in new and unexpected ways. We remain grateful to all of our clients for trusting us to protect and grow their businesses.”
In the U.S., R/GA has offices in Austin, Texas, Chicago, Los Angeles, New York, Portland, Ore., and San Francisco. Anonymous sources told AgencySpy that R/GA is closing its Chicago office in light of the measures being taken. An R/GA spokesperson said “some offices were impacted more than others, but we still have a presence in Chicago” when asked about the closure.
The steps R/GA is taking to cut costs are in line with ones IPG CEO Michael Roth announced earlier this month. In an internal memo to employees, Roth said the holding company’s agencies are implementing “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.”
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