What Omnicom Gets for Its Layoffs: $116,000 Per Person
Omnicom reduced its salaries bill by $404 million in the last year as it laid off 3,500 people, according to a filing with the SEC. Crunch those numbers and you find that, on average, laying off each Omnicom staff member saved the company about $116,000 in salary and benefit costs.
The total cut was 16.7 percent of Omnicom's staff cost base.
While job cuts, redundancies and attrition at BBDO, DDB, TBWA and the other Omnicom shops are not news, Omnicom put some details on the scale of those cuts in its most recent 10-Q statement. It covers Q2 2008 to Q2 2009 -- roughly the same period in which the recession first struck the agency holding company, forcing Omnicom's reaction.
This chart from the filing contains all you need to know (click to enlarge):
Note that revenue is falling faster than staff and operating costs -- which explains why CEO John Wren signalled there may be more job cuts in the next three months in his last call with investors.
- See previous coverage:
- Omnicom Q2: Wren Sees More Layoffs in Q3; Cashflow Still Negative
- BBDO Staff Forced to Take Unpaid Vacation; Latest in a Series of Omnicom's Cashflow Maneuvers
- Omnicom Drops Bonuses for Top Execs Who Get Fired; Another Example of Lax Board Oversight
- BBDO Backs Off "Sequential Liability" for Media Outlets
- Omnicom's Top Execs Saw Pay Slashed to Save Bonuses for Underlings
- Omnicom Q1: CFO Weisenberger Hints at More Layoffs to Come