Diana Polekhina via Unsplash
Agencies across the industry are shedding staff via redundancies in reaction to the relentless grind of a weak economy with brands reducing marketing spend.
AdNews understands a number of redundancies have occurred within Clemenger Group and M&C Saatchi over the past two months.
Insiders say there are more cuts elsewhere, with one major agency expected to undergo a restructure shortly.
While the bulk of jobs affected are felt by local outposts of global players, cuts are affecting indies as well, sources say.
Despite Omnicom Media Group's staff numbers remaining stable year-on-year, OMG Australia COO Kristiaan Kroon told AdNews the Australian economy and many of its companies are in a complicated position.
"Employment is very high, but growth is low. For many businesses, this has created a need to review how they deliver products and services. In many cases, this is leading to redundancies in some areas while simultaneously creating new roles in others, often on a large scale," Kroon said.
A redundancy rush around the end of a calendar year is common as many businesses review, forecast and enact change to prepare for the coming 12 months.
The January period is also a typical time for volunteer redundancies, as employees return from the holiday period with a new perspective on their career.
Sources also see WPP's four-day office mandate as a strategy to encourage volunteer redundancies - though there is no evidence of this locally, sources say other markets are seeing more volunteer exits.
"After a hectic year in agency land, followed by spending quality time with family and friends over Christmas, it is inevitable to weigh up your life choices when you hit the ground with a thud again in January," Prime Mover Recruitment founder Simon Hadfield told AdNews.
"From a recruitment perspective we certainly tend to see more candidates looking at what the new year looks like for them and the first big decision is career and work life balance."
Client-side is also facing restructures, cuts and reduced budgets, adding to the stress on adland.
One independent CEO told AdNews "we ended the year knowing clients were undergoing restructures at their brands, so we're expecting uncertainty towards budgets again this year. No client is increasing a retainer year on year."
But with the economy predicted to be strong in 2025 and many agencies prepared to adapt their businesses to the current market, relief may come.
M&C Saatchi, for example, is soon to officially launch a global rebrand.
"While M&C Saatchi, like others in the industry, has made adjustments in response to the challenging economic climate, these steps are part of a broader plan to reposition the agency for future growth," said a M&C Saatchi spokesperson.
"We continue to invest in key areas of innovation, under our new positioning of 'Cultural Power', ensuring we remain a trusted partner to our clients and an inspiring place for our people to thrive."
WPP too, with flat growth, is in the middle of a wide ranging restructure. Revenue less pass-through costs, a metric used by WPP, showed like-for-like at just 0.5% in the September quarter. Full year guidance is for -1% to 0%.
Just yesterday GroupM axed its global agency CEO roles in major centralisation push.
Kroon agreed that the OMG business is part of this cycle of change and renewal evolving with customers’ needs.
"I’m fortunate to say that staffing numbers at OMG have remained stable year-on-year. We have adapted and evolved roles and teams and will continue to do so, but without the need for large-scale structural redundancies," Kroon told AdNews.
"Agencies are people-driven organizations, and for us, this stability reflects the exceptional efforts of everyone at OMG Australia and the continued trust of our clients, for which we are deeply grateful”.
Clemenger Group had no comment.
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