Restructure threatens more Havas job losses

Euro RSCG will become the UK's third-largest marketing communications group after a major restructure by Havas.

The consolidation, designed to halt a slide into the red, will bring together a number of specialist operations, but is expected to result in widespread job losses.

Havas confirmed earlier this month that it was making 850 more redundancies on top of the 750 job cuts already made, with the UK likely to bear the brunt of the axings.

The realignments come in the wake of a first half-year net loss of £41 million, against a profit of £10.8 million in the corresponding period last year. Operating profits fell 41 per cent to £49 million.

Alain de Pouzilhac, the Havas chairman, said the revamp was needed to prepare the group for "the significant changes anticipated within the media environment in the future and to relaunch our growth and profits".

As a result, the group is selling off or closing about 20 of its underperforming agencies and merging 17 others into a single global network built around its Euro RSCG brand.

Chris Pinnington, the Euro RSCG Partners chief executive, claimed the restructure provided "an extraordinarily strong collection of agencies with which to achieve our aim of setting up the UK's strongest integrated offering".

The decision brings down the curtain on plans to make Arnold Worldwide Partners a global network. It will now concentrate on the US.

In the UK, the Euro RSCG agency, already bolstered by last month's merger with Partners BDDH, will expand to embrace several Havas-owned specialist operations. These include: Brann, the direct marketing network; Riley HR Gardens, Britain's third-largest recruitment agency; Skybridge, the company motivation and incentive specialist, and the Grayling PR company, which operated within the Specialised Services division. Partners Andrews Aldridge and Columns Design also come under Euro RSCG's wing.

All the companies retain their identities, while adding Euro RSCG to their names and reporting to Pinnington.

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