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Is Maurice Levy’s Publicis Groupe suffering a nasty dose of indigestion?
Agency Spy in the US reports that Publicis has imposed a pay freeze – on all its staff, presumably, all 62000 of them – as it grapples with almost non-existent organic growth (about one per cent in the first half of 2015) and also the $3.7bn cost of buying US tech outfit Sapient.
CEO Levy says that Sapient is already making a substantial contribution to funds but even so it’s it’s the latest in a long list of digital buys – Digitas, Razorfish, Rosetta, LBi among others – costing the best part of another $3bn. Most of these are no longer operating independently so you wonder what value has been achieved.
Publicis denies there’s a wage freeze in place although it hasn’t offered any specifics. As with all such big company policies there’ll be exceptions, as when someone valued threatens to leave or a breakaway is on the cards.
Publicis isn’t only big marcoms group to be facing a period of slow growth and attendant problems. WPP and Omnicom have both warned shareholders not to expect too much this year.
The ad industry as a whole was quick to bounce from the depths of the financial crisis and its bigger players did pretty well through it anyway. But one man’s pay freeze is another’s round of redundancies. Publicis has already wielded that particular axe at BBH this year.
A further round of same would have a catastrophic effect on morale.
