Droga5 layoffs shock for New York agencies

It must be getting serious.

Droga5, a highly successful agency to all appearances, is laying off 40 people (five per cent of its workforce), the first time David Droga’s agency has had to make such cuts in New York although it closed its Sydney office a while back with the loss of many more jobs and has struggled to establish itself in London despite some good work.

Its abortive early efforts in London are said to have cost millions and there must be a doubt now over the office.

The agency says: “Droga5 has made the difficult decision to reduce its workforce in New York by approximately 5% in order to reshape the business in line with current business demands. We express our gratitude to the effected employees for their many contributions to Droga5.”

The agency, now 49 per cent owned by William Morris Entertainment (WME) has had a torrid time recently, parting with highly-regarded CCO Ted Royer and London ECD Rick Dodds over “inappropriate behaviour.” (Below D5 in happier times, Droga left, Royer centre).

D5 is the latest in a growing list of US agencies to cut back in the wake of client cutbacks. Most big clients are trying too reduce their fees or move from agency-of-record arrangements to buying campaigns as and when from roster agencies.

As ever in agency land, where the US leads the rest of the world follows.

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About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.
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