Interpublic Group revealed it is axing 3,500 jobs as it posted a net loss for the second quarter and warned its full-year earnings would fall below analysts’ expectations.
Following the 2,200 redundancies made in the first half, the latest job losses bring the total cuts to 10% of the group’s global workforce.
Interpublic reported a second-quarter net loss of $110.2m, a huge fall from the $166.4m net income in Q2 2000. Over the same period, revenue fell 4.3% to $1.74 billion, with US revenue sliding 7.3%.
The group also announced it would take a $500m restructuring charge in 2001, far more than the $300m it predicted last month, following “an abrupt change in revenue trends in the second quarter, which precipitated higher severance expenses and facilities termination costs.” Only $51.3m of the charge was recorded in the second quarter.
Due to the current economic downturn, revenues for the rest of 2001 are only expected to be flat, said Interpublic. Full-year earnings are forecast at $1.05 to $1.15 per share, below analysts’ predictions of $1.21.
News sources: Advertising Age - Daily Deadline; Adweek.com