Citigate Cunningham forced to reduce staff, salaries

PALO ALTO, CA: Citigate Cunningham has laid off 40 of its 210 employees, slashed the salaries of senior-level managers by 10% and shuttered its fledgling Chicago office.

PALO ALTO, CA: Citigate Cunningham has laid off 40 of its 210 employees, slashed the salaries of senior-level managers by 10% and shuttered its fledgling Chicago office.

PALO ALTO, CA: Citigate Cunningham has laid off 40 of its 210 employees, slashed the salaries of senior-level managers by 10% and shuttered its fledgling Chicago office.

President and COO Joe Hamilton confirmed the layoffs and salary cuts, and added that previously announced plans to open a New York office had been shelved.

The cost-cutting moves were prompted by a restructuring that collapses the agency's five business units - Brand Momentum, Momentum Research, Fifth Gear, Cunningham Ventures and Cunningham Public Relations - into a single company governed by three regional managers.

However, there appear to be other reasons for the cutbacks. Motorola has moved the majority of its business to Hill & Knowlton, which won the estimated dollars 3 million to dollars 5 million global PR account last May.

The agency also lost significant revenue this fall when Hewlett-Packard shifted most of its business to The Hoffman Agency. Furthermore, client Pitney Bowes has reportedly pared its agency PR budget by more than 50%.

The agency is also under pressure to show some of the profits promised by CEO Andy Cunningham last summer when details of the acquisition by UK-based Incepta were announced.

Incepta paid dollars 45 million up front and agreed to pay another dollars 30 million over the next three years if profitability goals were met.





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