AMV announces first cuts to staff

The advertising downturn has sparked further job cuts among

Britain's agencies, with Abbott Mead Vickers BBDO and HHCL & Partners

announcing a total of 31 redundancies, and M&C Saatchi admitting it will

be following suit.

The latest round of redundancies is compounding fears that the dramatic

drops in adspends will continue well into next year.

The 18 redundancies at AMV are the first made in the 24-year history of

the country's biggest agency, which managed to avoid lay-offs even

during the recession of the early 90s.

But with pitching activity having fallen off, spending reductions across

its 45-strong client base and other cost-cutting measures having been

exhausted, AMV's chairman, Michael Baulk, said there was no alternative

to job cuts.

At HHCL 13 staff, drawn from all departments, have been axed. Meanwhile,

M&C Saatchi, which expects to be hit by the drop in British Airways'

promotional activity, said it was "looking closely at costs and the

possibility of redundancies".

Two-thirds of the redundancies at AMV are being made in support

services, the rest coming from the creative department and account

management. Among staff having to leave are some who have worked for the

agency for 20 years.

Meanwhile, a pay freeze has been imposed on all staff earning more than

£25,000 a year.

AMV's senior managers have agreed to take pay cuts to fund increases for

staff earning under that figure.

News of the redundancies was broken to the agency's 300-plus workforce

on Monday by Baulk and the managing director, Cilla Snowball.

Baulk said: "Our assumption is that our income next year will be flat so

we can't allow our costs to rise. We've cut back on everything else that

we can before we've touched people but, having done that, we can't get

to a cost base with which we feel comfortable."

He insisted there had been no pressure from Omnicom to cut jobs and that

there was no plan for further redundancies. "You can never say never,"

he said. "But we've taken prudent measures which we don't intend to



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