F-H chiefs take pay cut as market remains unsettled

Fleishman-Hillard bosses are set to take voluntary pay cuts and are considering further redundancies across Europe as the group braces itself for a rough financial ride into the middle of next year.

The agency has already confirmed plans to cut its US workforce by close to three per cent - or roughly 50 people - in the fourth quarter of this year and has not ruled out similar action in the UK and Europe.

F-H, led by chairman and CEO John Graham, has already reduced its European headcount by 15 per cent, slashing up to 70 staff in the past year.

F-H European president Jack Modzelewski said while redundancies were not planned immediately, they were 'managing things tightly on a month-by-month basis'.

A number of senior F-H staff in Europe have already taken voluntary pay cuts and there are likely to be more in the pipeline.

'We are going to look at every position going into 2003 across Europe,' said Modzelewski.

'We're concerned about the duration of the economic downturn - people were predicting that it would be over by now but it's not and with the prospect of war on the horizon, we don't know when there'll be an upturn, so we're managing conservatively.'

Senior US-based staff have agreed to take fourth-quarter pay reductions of between three and ten per cent. Some employees have been offered the opportunity to buy additional holiday time, while others have switched to a part-time schedule to gain more work/family flexibility.

F-H US regional president for the Midwest Dave Senay said between one-third and a half of the US staff cuts will be in non-PR support functions.

'We have accomplished most of our expense reductions through non-personnel items,' said Senay. 'There is dislocation currently where you have staff skilled in a particular area where there is not a lot of demand.'

F-H has been diverting resources into growth practice areas on a global basis, beefing up support in healthcare and public affairs.

The group has recently made a small number of strategic hires across F-H's US offices as part of this plan. This month F-H Chicago appointed Paula Waters from Ogilvy PR Worldwide as SV-P and head of its healthcare practice.

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