NEW YORK: Weber Shandwick has confirmed it is laying off and furloughing staff and cutting the pay of top agency executives.
“Weber Shandwick has implemented a range of cost-containment measures in response to the COVID-19 crisis, all aimed at balancing our business and keeping it strong to protect the livelihood of our people and deliver for our clients,” said a Weber spokesperson, via email.
The agency did not reveal the size of the pay cuts or staff reductions, but a source familiar with the matter said it is planning to reduce its team globally by approximately 4%, mostly in North America and larger EMEA offices. Weber had 4,865 staffers last year, according to PRWeek’s Agency Business Report, including 2,980 in the U.S.
The layoffs and furloughs were announced on Monday, while the pay cuts taken by staffers at the EVP level and higher have been made over the last two months, a source said.
Part of the cost cutting in Weber’s London’s office will include voluntary “unpaid leave, reduced working hours or voluntary furlough or redundancy,” according to a memo sent to staffers by Weber London MD Helen Bennett that was viewed by PRWeek.
Unpaid leave or sabbaticals would last for up to six months, but staffers must intend to come back to the agency. Salaries, bonuses and benefits would be suspended during that time. London staffers can also choose to work a 10- to 11-month year and spread the cost of that unpaid leave over the remainder, ensuring they are paid while not at work.
The U.S. statement confirmed information shared in a leaked memo that Weber president and CEO Gail Heimann sent to Weber staffers on Monday.
“We have to part ways with a number of colleagues from around the network,” she wrote in the memo. Heimann added that Weber was “furloughing some members of our team and asking others to move to a reduced schedule until the business environment improves.”
The statement also said Weber has implemented salary cuts for senior leaders and agency executives. Raises and promotions are on hold and there is a limit on new hires.
“It is something I hoped I would not have to do,” Heimann added. “It is a wrenchingly hard decision to make. And I know it is indescribably hard for those to whom we are saying good-bye.”
The pandemic-induced cuts follow a year in which Weber’s revenue grew 3% to $869 million, according to PRWeek’s Agency Business Report. Last year also marked Heimann’s rise to CEO after longtime Weber leader Andy Polansky was named chairman and CEO of Constituency Management Group, the Interpublic Group division that houses Weber and other agencies.
Polansky said CMG’s PR firms registered low-single-digit growth on both an organic and as-reported basis in Q1 compared to mid-single-digit organic and low-single-digit as-reported growth the year before.
CMG’s PR firms are Weber, Golin, DeVries Global, Current Global, Rogers & Cowan/PMK and the Axis Agency. CMG also houses marketing specialist firms such as Jack Morton, FutureBrand and Octagon. CMG as a whole posted Q1 revenue of $307.6 million, a 3.7% organic increase from last year.
Other Interpublic PR firms operate outside CMG.