Big Chill: Layoffs at Leo Burnett Portend Cold Winter in Chicago
Venerable ad agency Leo Burnett in Chicago laid off 35 people this week, but why? It's a bit of a mystery: The ad economy is recovering nicely and the U.S. is leading the way. Publicis (PUB), Leo Burnett's corporate parent, reported that organic revenue growth in the U.S. was above 10 percent in Q3 2010. Leo Burnett's boat ought to be rising on that tide but somehow, it isn't.
Leo Burnett recently won the $70 million Travelocity account, and its new "Mayhem" work for AllState has been well-received, so the shop ought to be hiring, not letting people go. These layoffs come as an ominous sign. Can CEO Tom Bernardin turn this ship around?
There are four other things linked to Leo Burnett's fortunes that I wouldn't like the look of if I were an employee at the once-dominant agency that partially inspired Mad Men.
- Publicis' real growth is in digital ads, not traditional advertising, and healthcare. None of these are Leo Burnett's specialties.
- Leo Burnett won only one account in the U.S. in Q3 (sister shop Fallon won 3, by comparison, see page 7).
- There's been a steady leak of executive talent out of Leo Burnett for several months, and little news of major talent hires.
- Chicago is not the town it once was in the ad biz.
Some staffers are voting with their feet:
- Executive creative director Bob Winter left in October.
- VP planning director Neil Cleary left in August.
- Executive creative director Kevin Flatt left in May.
- Chief strategy officer Ben Kline left in March.
We made the difficult decision to restructure a bit today with some job eliminations. Our business is very strong but ever changing, and these changes allow us to get and stay ahead of the curve.The question is, can the agency wake up in time to avoid the fate of JWT Chicago and DDB Chicago, also once-great shops that have struggled to adapt to the new century? (P.S.: George Parker thinks there are impending layoffs at DraftFCB, another agency with a large Chicago footprint, and commenters under the AgencySpy item also mention jobs gone at Draft. Yikes! Chilly winter in Chi-town!)
Related:
- Will the Real Don Draper Please Stand Up? 5 Admen Who May Have Inspired Mad Men
- Fear and Loathing at Allstate: New TV Ads Reflect "Mayhem" on Its Income Statement