- Omnicom, the world's second-largest advertising holding company, confirmed in a memo from CEO John Wren that it would furlough and lay off staff due to the economic effects of the coronavirus pandemic.
- In the memo, Wren thanked employees but wrote that Omnicom has to "respond quickly to the reality of the moment." He also outlined other cost-cutting steps.
- Omnicom follows rival holding company Dentsu, which instituted furloughs and pay cuts earlier this month.
- During the last economic downturn in 2018, the company laid off an estimated 5% of its global workforce, or about 3,500 people.
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John Wren, chairman and CEO of Omnicom, sent a memo to all employees today stating that the world's second-largest ad holding company would furlough and lay off staff across its global agency network due to the economic effects of the coronavirus.
The full memo, which is included below, thanks employees for their work but stated that "we have to respond quickly to the reality of the moment" by reducing expenses in ways that would affect Omnicom's 70,000-plus employees worldwide.
An Omnicom spokesperson declined to comment.
A source who is known to Business Insider but requested anonymity because they are not to comment said the company, which includes agencies such as BBDO, OMD, and TBWA\Chiat\Day, said furloughs were expected to begin this week.
The scale of the changes is unclear. During the last economic downturn in 2008, Omnicom laid off at least 5% of its global workforce, which amounted to 3,500 people or more. Analysts said the current recovery would most likely be longer and more challenging for the ad industry.
Read the full memo below.
A message from John Wren
As the impact of COVID-19 continues to evolve, we are focused on protecting the safety and well-being of our people, continuing to serve our clients and preserving the strength of our business.
I have personally heard from clients around the globe just how much they value the work you are doing in their time of need. Thank you for everything you are doing, despite all the challenges.
Unfortunately, COVID-19 has had a profound impact on the economy, on our clients' businesses, and in turn, on ours. While we hope for a swift recovery, we have to respond quickly to the reality of the moment, to ensure the sustainability of our business and our ability to continue to provide our clients with outstanding service.
Since my last note to you, we have solidified some of the internal measures to adjust our business to meet the changing needs of our clients. Regrettably, this will include furloughs and staff reductions across many of our agencies. We are doing everything we can to limit staff reductions, and to take care of those who are affected.
- Where possible, our agencies will use furloughs rather than permanent reductions, so we can bring people back if, and when, conditions improve and client demand recovers.
- Our agencies will participate in government subsidy programs around the world to reduce the number of permanent staff reductions we need to make.
- We have expanded coverage in our U.S. health benefit plans for those affected by COVID-19.
- We are actively looking to move people into areas of our business that are growing, such as Omnicom Health Group.
- Omnicom's executive leadership team, including our Network and Practice Area CEOs, are reducing their salaries by a third, and I am waiving 100% of my salary, through the end of September.
- With few exceptions, we have stopped all new hires, frozen salaries, and reduced the number of freelancers we use.
- We are eliminating discretionary costs and capital expenditures, wherever possible, including participation in award shows and industry events.
- Lastly, we have suspended our share repurchase program, have strengthened our liquidity position through new financings, and are conserving cash wherever possible.
You are the heart of our business and that makes these actions extremely difficult. We have survived crises before. Our people and our company have shown tremendous grit and resilience and we will come out of this stronger.
Thank you for your hard work and commitment during this difficult time.
Stay home. Stay safe.
John
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