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Omnicom and IPG annual reports reveal the extent of Covid-19 job cuts

Omnicom and IPG annual reports reveal the extent of Covid-19 job cuts

Omnicom and Interpublic slashed a combined 10,000 roles between them throughout 2020 as a direct consequence of the pandemic, newly published figures show.

What do the numbers show?

  • Harrowing annual reports for both Omnicom and Interpublic lay bare the scale of job losses over the past year as emergency measures such as a hiring freeze, furlough and temporary salary reductions were imposed.

  • A detailed breakdown of employment at the two largest US agencies showed that these and other measures saw Omnicom shed 5,900 employees, leaving it with a payroll of 64,100 as 2020 drew to a close.

  • Staffing levels at Interpublic also took a hit, dropping 4,100 to 50,200 total over the same period.

  • In percentage terms, Omnicom contracted 8.4% by headcount, still a lower rate of decline than organic revenue which slid by a double-digit 11.1%.

  • Over the road at Interpublic the number of staff on the books fell by a slightly less severe 7.6%, outstripping a relatively modest 4.8% contraction in organic revenues.

  • Differing leadership approaches to the crisis saw Omnicom chairman John Wren authorize much of the retrenchment in the second quarter at the hight of pandemic panic whereas his counterpart Michael Roth pursued a more staggered approach to layoffs throughout the year.

  • With fewer staff and new work routines comes less demand for real estate, a trend evidenced across all the big six agency groups. In the past year, Interpublic alone has removed 1.7 million sq/ft of floor space from is global real estate footprint, a fall of 15% from its pre-pandemic height.

Why it matters

  • The figures lay bear the real-world impacts of the global health crisis on some of the biggest names in the industry but may represent the nadir of the crisis as the vaccine rollout encourages chief executives to begin to dare that the worst may be over.

  • While the annual reports are largely backwards-looking, forward sentiment reveals more cautious optimism for what 2021 will bring.

  • The figures confirm that Interpublic has weathered the Covid-19 storm better than its five fellow agency big beasts, as determined by financial filings made public thus far.

  • A question mark still hangs over the strength of WPP, Publicis Groupe, Dentsu and Havas, which have not yet divulged their headcount stats.

  • Publicis has already displayed confidence in its underlying position however after authorising the repayment of salaries sacrificed during the height of the crisis after 2020 revenues outperformed market expectations.

  • WPP had reported a loss of 5,000 positions during the first six months of 2020 while counterparts at Dentsu International weathered around 6,000 job losses in December.