Interpublic Earnings: Ad Agency Spent $165M Just to Fire People Last Year

Last Updated Feb 26, 2010 5:13 PM EST

Interpublic (IPG) spent $165 million firing people last year, double what it spent to lay people off the year before, the ad agency holding company said in its Q4 2009 earnings statement. There were 5,500 fewer people working at the 40,000-strong network. The money was spent on "severance charges," such as compensation and benefits for outgoing executives.

IPG's revenues dropped a colossal 13.4 percent, down to $6 billion. That's a decline of almost $1 billion in business from 2008.

BNET noted earlier that IPG is faring the worst out of all the major holding companies in the recession, in part because it remains hobbled by reimbursements it must make to clients ripped off in an accounting scandal that surfaced in 2004.

There is some good news. First, taken sequentially, revenues have trended up since Q1 2009. Second, although IPG reduced its staffing costs by 8.8 percent in 2009, it reduced them only 2.6 percent in Q4 2009.

Put those two together and that suggests CEO Michael Roth (pictured) has finished squeezing blood from the stone. If he's right with his "cautious optimism" for 2010, then IPG could start re-hiring any day now.

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