Markets

BBDO Staff Forced to Take Unpaid Vacation; Latest in a Series of Omnicom's Cashflow Maneuvers

By Jim Edwards

Updated on: June 15, 2009 / 1:06 PM EDT / MoneyWatch

The 450 staff at BBDO Detroit are about to "enjoy" two weeks of forced unpaid vacation as the agency scrambles to save money, AgencySpy reports. Tribble adds that the move will save BBDO about 36,000 payable wage hours.

The move comes after BNET noted in April that Omnicom CFO Randy Weisenberger hinted there would be further layoffs at his network, which lost $685 million in cash during Q1 2009.

Much of that cash went in the form of media advances. The agency won't get it back until its clients pay up. However, Chrysler, BBDO Detroit's major client, said it owed the shop $58 million in its bankruptcy filing. (It's not clear how much of that $58 million is a pro forma legal filing and how much BBDO will actually recoup.)

That has left Omnicom in the position of trying a variety of interesting cash-saving activities, including:

Flirting with asking media providers to share some of the risk when it places its ads. That has been unpopular with the media, which seems to think that it ought to be paid even when clients turn into deadbeats -- an event beyond BBDO's control.
Axing bonuses for its top executives (such as BBDO CEO Andrew Robertson, pictured).
Delaying payments to commercial producers and photographers.
Laying off about 195 staff at BBDO Detroit and 189 across North America.
Ending a policy in which top execs would get bonuses for being fired.

Last thought: BBDO staffers might want to ask themselves, is getting a European-style four weeks vacation this year really all that bad? Only the U.S. forces its employees to work like slaves with only two weeks off a year. Perhaps it is time for America to come into line with international standards and give workers a decent level of minimum vacation time.