WASHINGTON: Ogilvy Public Relations has reduced its staff in Washington as federal purse-strings tighten.
Between 10 and 20 staffers have been laid off, affecting employees from the SVP level to account executives at the office.
“The need to reduce staff is caused by a changing commercial landscape, a reassessment of market opportunity, and the need to adapt the structure of an organization that has been built on a decade of significant year-on-year growth,” said Rachel Foltz Ufer, SVP of business development and external relations at Ogilvy PR, in a statement.
Sources familiar with the situation say that between scrutiny of government spending by members of Congress to the “sequester” cuts, the firm is not expecting many new business opportunities to emerge from the federal government this year.
The well is not completely dry. On April 30, the General Services Administration awarded Ogilvy a contract worth nearly $900,000 to manage the GSA.gov website and the GSA employee-facing intranet site, according to records. Last year, Ogilvy brought in business from the Internal Revenue Service, the National Institutes of Health, and the Centers for Disease Control and Prevention.
Agencies at rival holding companies are also seeing the effects of the federal government tightening its belt. FleishmanHillard CEO Dave Senay told PRWeek recently that budgets have frozen on some of his firm's contracts with the Department of Defense, but he did not have plans to let employees go. Instead, staffers were assigned to other projects.
MSLGroup Washington DC MD Neil Dhillon told PRWeek that he is seeing companies reduce DC-based work and campaigns because of sequestration. He said MSL was not laying off employees.