Omnicom to shed 3,500 jobs

LONDON - Omnicom is cutting 3,500 jobs, nearly 5% of its global staff as it is hit by account losses and the dire fortunes of the US car industry.

Quoting executives "close to the situation", US trade journal AdAge, said that the round of redundancies at Omnicom would be concluded before the end of the year and may be followed by more in January.

The cuts are understood to range across the group, but have left some agencies untouched.

One executive said: "Wherever adjustments had to be made, agencies that needed to make the adjustments made them. That does not mean all companies made adjustments."

BBDO in the US is understood to have been particularly exposed to job cuts. The agency lost the US Pepsi account earlier this year and is vulnerable to the financial health of ailing car manufacturer Chrysler, which according to AdAge owes Omnicom $80m (£52m).

BBDO Detroit already cut 22% of its staff last month due to Chrysler reducing its spend. The carmaker, along with GM and Ford, is pleading with the White House for an emergency loan to keep it going until the end of the year.

The three companies said yesterday they are shutting down production for a month across 59 factories.

Chrysler is taking radical action and closing all its North American manufacturing plants for at least a month as it awaits news of US government loans.

It is also reported that Chrysler and General Motors are back in talks about combining their businesses.

Another Omnicom agency affected by the cuts is media shop PHD, which is laying off 30 people and closing its Atlanta office.

Earlier this week more US agency job cuts materialised at Publicis Groupe's Digitas, which shed around 42 jobs or 2% of its workforce.

The cuts announced by Omnicom follow comments by Sir Martin Sorrell last month when he said there would be job cuts in its more mature markets in 2009, but said WPP would continue to invest in emerging markets.

This week sources told Brand Republic that Sorrell issued a memo calling for agencies in Europe to make cost savings of up to 30%.

However, WPP said the report was completely untrue.

WPP recently completed its £1.1bn acquisition of market research firm TNS.

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