Levy warns of job cuts following merger of Publicis with Bcom3

Publicis is likely to cut jobs in the wake of its merger with the rival advertising holding company Bcom3, according to the chief executive, Maurice Levy.

He added that the cuts would probably come from within the holding company rather than the individual agency networks, but would not elaborate further.

The cuts would be necessary if the combined company was to reach its target profit margins next year.

Levy is aiming for a operating profit margin of 15 per cent for the combined company in 2003, but neither holding company is at that level of profitability independently, according to reports. This year, Levy is aiming for a 14.1 per cent margin, the figure it reported last year.

"The market situation is quite difficult and difficult to predict. However, I am very confident that we will reach and deliver the targets, Levy said.

As well as making redundancies, Levy also stressed the importance of winning new business from existing clients to improve the balance sheet.

He said cross-selling to the new group's core roster of clients would add further to its revenue streams. He wants to encourage clients such as Procter & Gamble - which will make up 8 per cent of the new group's revenue - to put business into other agencies within Publicis.

Levy refused to comment on reports that cost-cutting would also come from merging networks, and squashed rumours that D'Arcy would be merged with Leo Burnett, saying there were no plans at the current time.

D'Arcy lost its place on the global Mars roster this year, as well as its hold on the P&G Pampers account.

The new company, to be called Publicis, will include Bcom3 networks such as Leo Burnett, D'Arcy and Starcom MediaVest, as well as the Publicis-owned Saatchi & Saatchi and Fallon. The group will be the fourth largest, with a revenue of £1.9 billion.

Publicis and Bcom3 announced their merger plans in March 2002. The Japanese advertising group Dentsu will also take a stake in the new company.


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