Back in May, we posted on reports that Publicis Groupe had followed a somewhat optimistic Q1 earnings report with a company-wide pay freeze: no raises, no bonuses and no promotions at any of its various international operations.
Publicis took issue with this post, but multiple sources confirmed that it was true. Now we hear that it has happened again. This time it’s a bit less surprising: last week, CEO Maurice Levy called his company’s Q3 results “disappointing” and told investors that he would have to cut the company’s full-year forecast due, in part, to a group of clients that cancelled or postponed their scheduled campaigns. Levy’s quote:
“The month of September showed zero growth due to numerous campaigns being postponed, mainly in digital operations. The level of cuts are surprisingly high and coming from many different advertisers from packaged goods, automotive, and pharma.”
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It wasn’t such a terrible report, though: Publicis has done well in the huge string of media reviews that some have unfortunately dubbed “Mediapalooza” even though it had more at stake than other holding companies, and most of the campaigns Levy mentioned were “one-off projects” rather than contract work. Publicis even brought out a slide to make that point, H/T Lara O’Reilly of Business Insider.
At the same time, the company’s stock fell almost 10 percent last week before making a slight comeback this week.
We hear that the latest order came down from Levy himself: no raises, new hires, bonuses or promotions until he indicates otherwise. And yet, based on commentary from some of our sources, freezes are the new normal in the holding company world.
We’ve reached out to Publicis North America for comment, but the group has yet to respond.