In an internal email sent to employees of Omnicom agencies, CEO John Wren outlined a series of cost-saving measures the holding company is taking in response to the impact of the coronavirus pandemic. The memo indicated that these measures would include furloughs and layoffs across many Omnicom agencies.
Noting the “profound impact on the economy, on our clients’ businesses, and in turn, on ours,” Wren acknowledged that Omnicom was taking steps “to ensure the sustainability of our business and our ability to continue to provide our clients with outstanding service.”
Wren indicated that this would include furloughs and layoffs, while stressing that the holding company would utilize steps to avoid the latter, wherever possible.
“Regrettably, this will include furloughs and staff reductions across many of our agencies,” he wrote. “We are doing everything we can to limit staff reductions, and to take care of those who are affected.”
“Where possible, our agencies will use furloughs rather than permanent reductions, so we can bring people back if, and when, conditions improve and client demand recovers,” he added.
He also noted a hiring freeze, frozen salaries and a reduction in the number of freelancers the holding company utilizes “with few exceptions,” as well as eliminating discretionary costs and capital expenditures “wherever possible,” including participation in awards shows and industry events.
Omnicom will participate in government subsidy programs in various offices around the world, where possible, to avoid the need for layoffs, Wren said. At the same time, he added, Omnicom is looking to move some employees into areas of its business that are growing, such as Omnicom Health Group.
Additionally, Omnicom’s executive leadership team, including network and practice area CEOs, are reducing their salaries by a third. Wren himself announced that he would waive 100% of his salary through the end of September. He also explained that Omnicom had suspended its share repurchase program and strengthened its liquidity position through new financings, while “conserving cash wherever possible.”
He concluded the memo by calling Omnicom the “heart of our business” and thanking them for their hard work and commitment.
The news follows a series of similar announcements from other holding companies.
On Friday, IPG CEO Michael Roth issued an internal memo addressing layoffs and other cost-cutting measures at IPG. Dentsu Aegis Network also recently implemented a series of cost-cutting measures including layoffs, furloughs and salary reductions. On Monday, in conjunction with releasing its Q1 earnings early, Publicis Groupe announced it was considering additional cost-cutting measures including salary reductions, furloughs and, if necessary, layoffs. After WPP announced initial cost-cutting measures such as hiring freezes and suspending discretionary costs, WPP CEO Mark Read told Adweek the holding company couldn’t rule out job losses.
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