Global advertising group M&C Saatchi is cutting costs, including salaries, and suspending shareholder dividends as the coronavirus shrinks the advertising dollar.
In an update to the London Stock Exchange, the company says it continues to pitch for new business despite a "sharp drop" in demand for its services. However, demand is still steady in the talent and influencer businesses.
"We are taking wide-ranging action to mitigate the financial impact of the crisis and maintain a strong liquidity position in anticipation of a further deterioration in the business environment," the company says.
"Despite the increased pressure on cash, the company forecasts it has sufficient liquidity."
All the global advertising companies have their staff working remotely and have taken steps to gather as much cash as possible to meet the fallout from a pandemic squeeze on the economy.
M&C Saatchi says trading in the first two months of 2020 was in line with expectations but the impact of COVD-19 was felt in March, with a reduction in activity in several markets.
The company says it is not possible to accurately predict the scale or duration of the impact on its business.
"We are reducing costs in a number of areas, including the elimination of significant rent, IT and travel expenditure and reduced capital expenditure in the London head office," the company says.
"We are focused on protecting our employees as much as possible and will be securing government support to furlough staff in the UK, the US and Australia."
The board of directors and senior management team have committed to a 20% cut in their salaries.
"We regretfully commenced consultation with a number of employees across the group about possible redundancy before the recent escalation in the Covid-19 crisis and this process will continue," says M&C Saatchi.
In Australia, industry insiders say M&C Saatchi is having one of its busiest periods as a range of clients recast campaigns in the light of the pandemic.
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.