Layoffs Cost UK's Biggest Agencies Over £28m

12 December 2003

Recession-triggered redundancies have cost Britain's biggest ad agencies over £28 million ($49m; €40m) over the last two years.

As adspend tumbled, the top shops showed the door to an average of 35 staff each, around 6% of the total workforce. Each layoff cost around £30,000.

The figures are contained in a report prepared for the Institute of Practitioners in Advertising and so far distributed only to the chief executives of the country's top twenty agencies. However, a copy has fallen into the hands of British trade magazine Campaign.

It is thought that the study -- prepared by Niall Hadden, director of human resources at WCRS -- has been kept under wraps because it paints the ad industry in an unfavourable light, claiming it lags other sectors in providing flexible working conditions.

The report found that just 7.5% of agency staff are hired on non-standard contracts, with over 90% employed on a permanent basis. In contrast, the national average is for 44% of employees to have non-standard working arrangements.

"These figures are truly dismaying," one IPA insider told Campaign. "Agencies that are supposed to be flexible and creative don't seem to be showing much of either when it comes to hiring."

However, Rupert Howell -- former IPA president and now McCann-Erickson's president for Europe, the Middle East and Africa -- defended the industry.

"We'd love to be able to juggle our resources to match demand but we're in a client service business and clients demand service 24 hours a day and seven days a week," he said. "There are some really good freelance people available now, particularly creatives and planners, and the situation is changing. But very slowly."

Data sourced from: BrandRepublic (UK); additional content by WARC staff