Leo Burnett Lays Off 75
Leo Burnett in Chicago laid of 75 staff, following its $15.5 million settlement of charges that it defrauded the U.S. Army account of $20 million in billings.
The cuts come just one month after Publicis chief Maurice Levy said he did not "foresee" jobs cuts in his agency network.
The cuts bring the BNET Ad Agency Layoff Counter to 6,902 jobs lost.
The loss of $15.5 million in cash from the Army debacle is roughly equivalent to the loss of an account that billed $150 million. (Do the math based on this formula.)
Not helping were Burnett's ties to General Motors' Buick account, which is at a standstill, according to Ad Age, and its failure on the new business front.
Burnett USA President Rich Stoddart said in a memo:
I want to be clear, however, that today's actions are not only a response to today's economic climate. We did not approach these decisions as a purely financial exercise. While doing so may have allowed us to reach short-term objectives, it would not have put us in position for long-term growth and success.Burnett probably remains de facto disqualified from every federal ad contract available because of the Army fraud -- not a good position to be in when the Obama administration is planning a massive increase in counter-recessionary spending.
- See previous BNET items on Leo Burnett:
- The Scale of the Stupidity at Leo Burnett
- Leo Burnett Pays $15.5 Million to Settle Allegations It Defrauded the U.S. Army