SEATTLE: Waggener Edstrom Worldwide laid off 43 staffers, or about 5% of its workforce, on Wednesday. Most of the job cuts took place in the firm's Pacific Northwest region.
The agency eliminated 33 positions in its Portland and Seattle offices, with the 10 other layoffs taking place across other US and Asia-Pacific branches, said Scott McLaughlin, SVP of corporate communications at WE. He declined to specify the other US offices that saw job reductions.
WE did not lay off staffers in the EMEA region, McLaughlin added. The job cuts took place across staffing levels.
McLaughlin said the reason for the reductions was a “convergence of about four different things,” the first of which is reorganizations at longstanding blue chip client Microsoft.
“We have a long history with [Microsoft], and we adapt with them; along with their reorganizations, there were some budget reductions that we took,” he said.
Some affected staffers were on Microsoft account teams, as well as groups that support the account, such as insights and analytics.
Microsoft began centralizing its communications structure in August, bringing together comms units from various divisions into a combined team led by corporate VP of corporate communications Frank Shaw. Previously, the PR leaders in distinct Microsoft product and service units such as Skype or Xbox reported to their respective marketing leader. The company began revamping other divisions in July.
Microsoft said at the time that the reorganization would not affect any of its PR agency relationships. The Redmond, WA-based company also works with Burson-Marsteller and Edelman, among others.
Microsoft CEO Steve Ballmer said in August that he will step down in the next year. Last month, the company announced plans to acquire Nokia's devices and services business.
Another reason for the staff reduction is that WE is planning to unveil a research and analytics tool that “automates a lot of what was previously being done manually,” explained McLaughlin. He added that the agency also tracks its business, services, and practices on a regular basis, and there were a couple of areas that were “consistently not meeting plan, and we had to take steps on those.”
The final impetus was that the firm regularly evaluates general workforce management, capabilities, and skill sets.
Despite the staff reductions, McLaughlin said WE is “going to continue to bring new capabilities online and expand our global practice and grow.”
WE reported 1% US revenue growth in 2012 to $101.4 million, according to PRWeek's Agency Business Report. Global revenue growth was 2.3% in 2012 to $118.5 million, compared with the previous year. WE listed its headcount at 939 globally and 682 in the US for 2012.