Recent changes within Microsoft’s business have begun affecting its advertising partners. This summer, the tech giant announced both its biggest round of staffing cuts and its biggest quarterly loss–and last week Pereira & O’Dell made some related changes in its San Francisco office.
The move concerned the Skype account, which will no longer be with the agency.
Pereira & O’Dell has done some unusual work for the client over the past few years: the real-life “Stay Together” campaign won a slew of Lions and led to a profile piece in which CCO P.J. Pereira explained how it all came about, and a recent ad starring “the world’s first climate change refugees” followed up on that hyper-realist theme.
At the moment it’s unclear what steps Microsoft will take to market its video service moving forward, because a spokesperson confirmed that the business will not go to its default agency, McCann’s M:United.
Because of the pending loss, Pereira & O’Dell (which recently inspired a New York Times headline by breaking with parent company Grupo ABC) had to let several employees go. We’re told that the change affected members of the Skype creative and account teams, but the agency did not provide specifics and does not anticipate any further cuts.
Much of the change stems from Microsoft’s acquisition of Nokia’s headset division, but the company is struggling in other ways as well. Cloud-related business is up, but PC sales are down and Windows is no longer the moneymaker it once was due largely to the fact that alternatives from Google and Apple are free–hence this week’s campaign by M:United touting the new Windows 10 as “a more human way to use the web.“