Interpublic’s MullenLowe has become the most high profile agency to announce Covid-19 lay-offs with ten per cent of the agency’s US staff out. They’re being offered three months’ healthcare.
The timing’s a touch sneaky, just before Easter.
It won’t be the last of course, Anomaly is cutting staff as are many other shops mostly beneath the radar. WPP’s Mark Read warned of similar measures earlier in the week and he employs over 100,000.
We don’t know yet if MullenLowe’s US move will affect its other agencies around the world but it seems almost inevitable that it will. MullenLowe London has been handling NHS advertising in the crisis.
Agencies, especially holding company-owned ones, face a terrible dilemma: with no income in sight and many clients not paying old bills, they can’t support credible structures. But cut back everything by, say, half and they’ll be in no position to re-establish themselves as credible partners when clients finally start spending again.
As publicly-quoted companies they’re already highly vulnerable to opportunistic bids from better-funded communications operators and private equity companies.
PS The illustration is MullenLowe’s Octopus logo, not the virus.