Ogilvy & Mather's UK chief executive, Annette King, has told staff that the agency needs to "be better and faster at making work," following the closure of its self-funded research and development unit Ogilvy Labs.
The agency told staff that the offshoot was being closed yesterday evening (8 August), with The Drum understanding that all staff including boss Nicole Yershon are being made redundant.
In an internal memo seen by The Drum, King said: "As we continue to evolve what we do and how we do it to ensure that we best serve our clients and stay ahead of our competition, we need to make changes to our business along the way.
"One of these changes concerns Ogilvy Labs, which launched in 2007, and has served us well for the last nine years. It’s been involved in some of most innovative, breakthrough work but as we move forward we need to be better and faster at making work and that will be our focus from here on.
"So, the Lab as we know it will be replaced over the coming weeks and months with new capabilities centred entirely around the goal, focused on helping our teams make and produce the bravest, most pioneering work as fast as our clients and their markets need us to."
She then went on to say that while the change was "exciting" for the business that it does mean some changes in terms of "who does what".
"Nicole Yershon, who has been with Ogilvy for 16 years, set up the Lab and until now has been running it as our director of partnerships, ventures and enterprise, is leaving Ogilvy. We thank her for all her hard work, energy and loyalty over the years and wish her all the very best with what is bound to be an exciting new chapter," she said.
King also confirmed that other members of staff Gemma, Jack and Matt will also be moving on, saying that the company hoped to stay in touch with all of them.
"We have plans for who will take on the team’s current responsibilities. If you have any questions or concerts on that front, please do ask me. More on what next for us in the coming week or two. As always, any questions, give me a shout," finished King.
The move to shutter the innovation hub appears to be part of a post-brexit cost saving plan from the agency. Earlier this year Ogilvy's worldwide executive director and EMEA chairman, Paul O’Donnell had warned it would reduce investment in the UK if the country voted to leave Europe.
King sent an official statement over to The Drum today, saying: "Ogilvy Labs’ job is now done as a separate Ogilvy entity, as each agency continues to innovate within their own specialist area and collaboratively across the Ogilvy Group.”