McCann Erickson’s Layoffs Affect 25-30 Staffers

N.Y. office cut needed to pay for new hires

Sources now estimate that 25 to 30 staffers lost their jobs in Thursday’s round of layoffs at McCann Erickson New York.

Such a cut represents a more than 5 percent reduction in the total New York staff of 450 to 500—slightly higher than the “less than 4 percent” estimate that an insider floated yesterday. A McCann representative declined to comment on the numbers.

The cut affected several departments, including the creative ranks and account management. Group creative directors and at least one group account director were among those affected.

Layoffs are a fact of life at agencies these days given that existing clients often cut back on spending and significant new business opportunities remain scarce. So, McCann’s cut is by no means unique. The New York office, however, is the headquarters of the global agency and therefore key to its—and parent company Interpublic Group’s—success. After all, McCann Worldgroup—the larger entity that McCann is part of—supplies roughly 30 percent of IPG's revenue, which totaled $6.53 billion last year. That fact alone drove IPG’s decision to install new global CEO Nick Brien early last year and, in turn, Brien’s November hire of new creative leader Linus Karlsson. 

Karlsson, who is chairman and chief creative officer for both the New York and London offices, is remaking his New York staff with hires such as executive creative directors Natalie Lam and Andreas Dahlqvist.

The new hires, however, have to be paid for, and without major revenue gains, the agency must cut costs. The layoffs came just a few weeks after McCann leaders met with IPG executives to discuss the shop's financial benchmarks for the rest of the year.

Noteworthy wins so far this year have been limited to Worldgroup’s retention of the U.S. Army account and an unusual catalog assignment from Ikea. Missed opportunities included Burger King, Stolichnaya, and Hennessy.

The agency is a finalist in ExxonMobil’s global review, however, and that represents its best chance to gain significant revenue, even if it doesn’t kick in until late this year. Final presentations are slated for later this month.