NEW YORK: Ketchum and FleishmanHillard announced staff reductions and pay cuts to their employees this week, in response to declining revenues caused by the pandemic.
“Due to the macro-economic environment caused by the COVID-19 pandemic, our business has felt the impact of reduced consumer and client spending,” Ketchum said in a statement emailed to PRWeek Thursday afternoon. “As a result, this week we regrettably took a combination of actions, primarily senior-level pay cuts and furloughs.”
A Ketchum spokesperson declined to say if the “combination of actions” mentioned in its statement included layoffs in addition to furloughs.
In its statement, Ketchum said the actions were an attempt to “share the burden, protect as many of our people’s jobs as possible and align with government relief programs to protect people’s compensation” with the hope it can “reinstate our talent as quickly as possible.”
FleishmanHillard sent PRWeek a similar statement on Thursday evening, noting that it, too, has taken actions to lower costs in a number of its offices worldwide.
“It’s always difficult to part ways with colleagues,” FleishmanHillard’s statement said.
A Fleishman spokesperson would not say if parting ways meant layoffs or furloughs, though sources familiar with the matter said the company took a variety of approaches to reduce costs, including select pay reductions, though nothing was done across the board.
Fleishman’s statement also spoke about maintaining capacity and “positioning ourselves to reinstate staff quickly when work levels return.”
Insiders at Fleishman said that in New York, at least, agency leaders began meeting with employees Wednesday to discuss cuts. However, they added that administrative assistants and junior staffers at assistant account executive and account executive levels had already been let go.
Those meetings followed an April 15 email that FleishmanHillard CEO John Saunders sent to all staffers mentioning a Q2 hiring freeze and saying he had asked all GMs to “consider several options within their offices that will align payroll more closely to the revenue trend line we foresee.”
Neither shop would disclose the size of the pay cuts nor the scope of the staff reductions.
The cuts at the two Omnicom shops also come a week after Omnicom CEO John Wren confirmed the details of an internal memo sent to all 70,000 employees about staff reductions, salary slashes and furloughs at the holding company.
However, a spokesperson for Omnicom’s Public Relations Group, which houses Fleishman and Ketchum, along with Marina Maher Communications and Porter Novelli, said the holding company had not made a blanket request to all PR firms to cut staff and that it was an agency-by-agency decision each shop made based on the health of its business.
According to the Agency Business Report 2020, revenue for Ketchum in 2019 declined 1.95% to $502 million. In the report, CEO Barri Rafferty was quoted saying 2019 was a “transformational” period for the agency.
Revenues at Fleishman in 2019 were flat at $606.9 million. In the report, Saunders said the firm had to be “really competitive” as there was a lack of big pitching opportunities in 2019.