Riney Layoffs Show Muscle of New Team By Daniel S. Levin

The firing last week of some 20 staffers from Hal Riney & Partners firmly establishes the management team of president Tony Houghton and national creative d

The layoffs, which sent shock waves through the agency, pared more than 5% of the 330-person staff nationally, but the ax fell hardest in San Francisco where 13 people were let go including several well-respected middle-management executives who had significant tenures at the agency. They included senior vice president and group creative director Greg Wilson, who had been paired with Jerry Andelin, one of the original Riney partners; senior art director Richard Crispo, who is believed to have played a significant role in the Saturn campaign; and head of broadcast buying Nancy Baldwin. Three executives were cut in Chicago; four in N.Y.
Houghton said the action was necessary because the agency had long been spending too high a percentage of its income on salaries. In March it became clear that the cuts would have to be made, but the firm delayed doing so in the hopes of winning the $40-million Sears apparel account, which Riney lost to Young & Rubicam/N.Y. in the final rounds. ‘I don’t think yesterday was a good day,’ said Houghton a day after the announcements were made, ‘but people realize it had to be done.’
Others note that no such wholesale cuts had been made at Riney before, largely because, sources believe, that kind of action simply wasn’t in keeping with the style of the agency’s idiosyncratic founder. ‘People got frozen out,’ said a former employee. ‘That was the tactic. But there weren’t a lot of people who got fired.’
Many at the agency now believe that, unlike his predecessors who could never seem to wrest control from Riney himself, Houghton, who arrived in January from Leo Burnett/Toronto, has been able to take control of the management of the agency.
‘They were not just trimming the fat,’ said one former employee who has kept in close contact with the agency. ‘They are cutting to the bone to reshape the agency.’
The firings came last Tuesday without ceremony. One woman earmarked for a pink slip was out of the office on the day staffers were notified. When she returned to her office on Wednesday her telephone had been disconnected. Others were asked to leave immediately and told they would have to make arrangements to come back to get their personal belongings. Hal Riney, who some employees said was not present when the pink slips were handed out, was believed to be fly fishing in Honduras.
The action follows a string of failures to win new business as existing accounts at the firm have shrunk or stayed at fixed levels.
This latest round of cuts was presaged by the dismissal in April of senior vice president and director of creative services Carol Lee Kelliher, one of six original employees hired by Riney when he set up an office here for Ogilvy & Mather in 1976.
At the time, management said that Kelliher’s firing was the result of management changes that had made her job obsolete and that no other cuts were contemplated.
Sources within the agency say Riney still maintains a presence there, but that the work he reviews or gets involved with is done on a limited basis or when a client insists. Though he met personally with Sears executives, Riney’s hand was largely absent from the creative presented in that review.
Even so, some Riney watchers in the San Francisco ad community are skeptical about the extent to which he will be able to disassociate himself from the operations of the firm and allow the new management to shape the agency. ‘He’ll stay in the background,’ said this observer, ‘and at some point he’ll leap in and throw them all out.’
Copyright Adweek L.P. (1993)