400 More Jobs Gone at Interpublic

About 5,500 jobs have gone at Interpublic (IPG)'s agencies -- such as McCann-Erickson and Deutsch -- according to a New York Times interview with CEO Michael Roth. That's 400 more jobs than IPG told investors had been cut on its Q3 2009 conference call, on Oct. 28. That's more jobs than Omnicom (OMC).

It's another example of how layoffs in the ad business have been much more severe than the headlines would suggest. On the numbers provided by the NYT, IPG has axed almost 14 percent of its entire staff since the recession started. (It now has about 40,000 employees worldwide.)

The BNET Ad Agency Layoff Counter now stands at more than 45,000 jobs lost across the ad biz. Put another way, it's the equivalent of an entire international agency holding company the same size as IPG wiped off the face of the earth in the last year.

Some might say, Why should we care whether it's 5,100 or 5,500 jobs gone? They're about the same after all.

The answer is that future employment in the ad industry is partially dependent on agencies not laying people off. The more they add to the unemployment rolls, the longer the recession will be, and the fewer people agencies will be able to hire back. Here's why: More unemployed people means lower consumer spending. Lower consumer spending means lower sales for advertisers. And lower sales means less advertising, because advertisers often peg their ad budgets as a percentage of sales.

In November I asked whether the recovery was imminent or are we merely stopped at a landing on a still-descending staircase. Roth told the Times "worst is behind us." That's his opinion. But the numbers, for now, suggest the opposite.

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