Markets

Job Losses at Omnicom Stopped as Penny-Pinching Policy Kicked In

By Jim Edwards

Updated on: February 12, 2010 / 12:55 PM EST / MoneyWatch

Job losses at Omnicom (OMC) -- the parent company of ad agencies BBDO, TBWA and DDB -- have stabilized, according to CFO Randall Weisenburger. In a Q&A with Wall Street analysts to discuss the company's Q4 2009 earnings, Weisenberger was asked to give an update on Omnicom's employee headcount:

Craig Huber â€" Access 342 [an investment research firm]: What was your full time equivalent employee count at the end of the year? I believe it was 68,000 at the end of 2008.

Randall Weisenburger: We'll have someone find it if we have it. 63,000.

Those numbers are identical to the figures Omnicom gave analysts in its Q3 2009 call. (And they tally with BNET's Ad Agency Layoff Counter.) Previously, Omnicom produced an ever-growing number of of layoffs. This is the first quarter since 2008 that the company has reported no net loss of jobs. Good news indeed. (BNET previously made the pessimistic case here.)

It's not just jobs that have stabilized at Omnicom. Remember when the company began driving commercial TV producers and photographers nuts with its announcement that it would not pay them until clients paid their agencies? Turns out that policy finally started working: Omnicom reported its "working capital" (i.e. its ability to collect payments from clients faster than it can delay paying bills from vendors) increased by $564 million, and its overall cash increased $490 million (see page 7 of this presentation). While Q4 is normally a cashflow positive season for ad agencies, CEO John Wren (pictured) hailed the penny-pinching of his underlings:

We put a very significant amount of effort. We have working capital management starting at the end of last year and really re-doubled and tripled our efforts in this space.

I have to say our management teams at the network level and at the agency level have really done an outstanding job over the course of the year. I though we had historically done a good job and they proved that we could even do it better. So I'm very proud of them.

So if you're owed money by Omnicom, now you know where it is -- sitting in a checking account at 437 Madison Avenue. And saving the jobs of its employees.