Omnicom organic revenue falls 23%, 6,100 staff cut: 'We think the worst is behind us'
Ad giant Omnicom has revealed the impact of the pandemic, with organic revenue down a fifth year-on-year. It’s cut 6,100 staff and “shaved” more than one million square feet of office space to make up the deficit.
Omnicom organic revenue down 23%, cuts 6,100 staff: 'We think the worst is behind us'
Here’s what you need to know from the Q2 earnings call.
Financials
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Reported revenue of $2.8bn for the quarter. Down 25% year on year.
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Operating profit down 89% to $62.5m
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6,100 staff cut, of an estimated 70,000 at the start of 2020.
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Shaved over a 1 million square feet of space. Both cuts generated $500m in annualized savings.
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Worst hit sectors: events, field marketing and merchandising, and media.
From the boss
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The DDB and BBDO owner is looking to fast-track digital transformation initiatives to reflect where the consumer now is.
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Chief executive John Wren said: “We froze new hires and salary increases, we significantly reduced or eliminated the use of freelancers, we cut discretionary costs and capital expenditures wherever possible, and took voluntary pay cuts across our corporate groups."
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In the period, it won Peugeot and Air France accounts.
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And it also lifted the lid on its DE&I strategy, with an eye to launch OPEN2.0 in the third quarter. It aims to "drive increased representation and retention of all people of color".
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Wren concluded: “Based upon current market conditions, we think the worst is behind us with Q2 being the low point for year-over-year revenue declines in 2020. We expect some industries hit the hardest such as travel and entertainment as well as our event businesses will likely continue to be challenged, while other industries, such as retail, food and beverage, autos as well as our media buying business will likely see improvements.”