WPP pulls out of Russia as rival holding companies review operations
British holding company WPP has announced it is to cease trading in Russia. The company, which employs 1,400 people in Russia, said it was leaving the country because operating there would be ”inconsistent with our values.”
Will WPP’s competitors stay in Russia as sanctions hit clients? / Unsplash
In a statement it explained: ”We deeply regret the impact of this decision on our Russian colleagues. We will provide support to them and work closely with our clients and partners as we discontinue our activities in the country.
”We thank them for their commitment to the company and our clients.”
In an email sent to staff, chief executive Mark Read wrote that WPP would cease trading in Russia via a number of routes, including transfer of ownership and divestment from its its businesses there, measures which could enable its existing staff to keep their jobs. Read said: ”Our Russian colleagues have been dedicated and valued members of the WPP family for a very long time and I deeply regret the impact this decision will have on them.
”We will work with our people, clients and partners to consider all options including transfer of ownership and divestment, and we will provide additional and enhanced financial support to anyone who loses their employment as a result of this decision. Local agency leaders are discussing next steps with their teams directly.”
The company statement went on to say that WPP condemned the invasion of Ukraine and the humanitarian crisis that has ensued. ”Our 200 people in Ukraine have shown extraordinary resilience and bravery in the face of the horrific attack on their country and we have been inspired by their example and the outpouring of support from their colleagues in the region and worldwide.
”We are in constant contact with our leaders in Ukraine to provide financial and other forms of practical assistance for our employees.”
Following Accenture’s decision to cease trading in Russia late last Thursday, other major holding companies of the ad industry are reviewing their operations in the country.
Dentsu International EMEA chief executive Giulio Malegori told The Drum that the company, which owns agencies such as McGarryBowen and iProspect, is reviewing all its client relationships in Russia.
”We will only work with fully compliant partners, clients, suppliers and financial institutions and continue to rigorously minimize any impact on our clients’ activities as well as Dentsu operations. In regards to global businesses closing their Russian operations, we are closely reviewing this situation to better guide our clients and also make informed decisions for our business and communities as a whole,” he said.
”We continue to be deeply shocked and saddened as we witness the ongoing invasion of Ukraine. Our hearts go out to everyone whose lives have been impacted by this escalating conflict including our affiliate people in Ukraine, our employees in Russia, Central Eastern Europe and around the world. The health and safety of our employees continue to be our top priority and we are providing additional support to our people in need.”
Dentsu International employs over 1,500 staff in Russia, via subsidiaries such as Carat, DentsuX, Isobar and Posterscope. Russia is home to thousands of workers in the advertising and marketing industry, many of whom are employed by the six biggest companies in the industry.
US holding company Omnicom’s agencies OMD, PHD and BBDO all have bases in Moscow, for example. Its PR agency Ketchum represented the Russian government and state-backed energy giant Gazprom as clients between 2006 and 2014. Havas Group operates an agency ’village’ in Moscow, while WPP’s presence in Russia includes Wunderman Thompson, VMLY&R and Grey.
US holding company Interpublic Group (IPG) told The Drum it has cancelled all events in Russia.
An IPG spokesperson said: “As you would expect, our Russia operations are abiding with all sanctions imposed by the US and the broader international community. Our agencies in Russia involve approximately 200 employees, and we are assessing the most appropriate course of action that is both responsive to the gravity of the situation and also seeks to take into account the welfare of our colleagues.
“As indicated at the outset of this unprovoked war, our primary focus continues to be remaining in regular contact with our affiliate partners in Ukraine in order to determine the most effective ways for us to provide support to them, and the needs of all Ukrainians, during this crisis.“
A Havas Group spokesperson told The Drum: "In Ukraine, lives are at stake. We are providing support and assistance through whatever means necessary and will continue to do so in what are incredibly distressing circumstances. In Russia, we continue to monitor a fast-moving and complex situation for our teams. We make a clear differentiation between the Russian government and the Russian people, and the livelihoods of the latter are at stake there through no fault of their own. As a result, we will take the time we need to consider the route forward and will provide a further update in due course.“
Omnicom also confirmed that it was not considering leaving Russia. A spokersperson said: “Our number one priority remains the safety and well-being of our more than 200 colleagues in Ukraine (before the crisis) and 2,000 colleagues in Russia. We remain focused on the most appropriate course of action that takes into account the gravity of the situation and the welfare of our people. At this time, we are in consultation with our global clients on their requirements in Russia. We will continue to monitor the situation, as well as operate in compliance with the sanctions imposed by the US, UK, and EU.“
Accenture announced last week that it was pulling out of Russia in a statement released to the press, while its consultancy rivals McKinsey and Boston Consulting also ceased trading in the country. The firm employs 2,300 people in Russia, though a spokesperson declined to say how many of that group work for Accenture Interactive, its marketing and advertising network.
Accenture said in a statement that it took action because it “stands with the people of Ukraine, governments, companies and individuals around the world calling for the immediate end to the unlawful and horrific attack on the people of Ukraine and their freedom.”
The company has vowed to provide support for its former employees and thanked them for their service. The now-shuttered Russian ’Future Camp’ had been described by the company as “a unique venue promoting digital innovation, design thinking and innovative concepts that can deliver tangible business results through rapid prototyping and liquid development.”
Publicis Groupe has also been approached for comment.
Agencies operating in Russia will likely be affected by sanctions levied against its government and financial infrastructure. The Drum explored what the impact on agencies could look like last week.
This article was last updated March 8.