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
repeat."
