GroupM WPP, the largest media agency in the industry, is making a series of layoffs this week, Digiday has learned, with between 114 and 126 employees losing their jobs or leaving its global network.
Five sources, all of whom declined to be named, attributed the layoffs to a larger realignment of roles as a result of a merger within GroupM last April. Those mergers include the merger of Essence and Mediacom with EssenceMediacom, the absorption of OgilvyNeo into Mindshare, and the creation of GroupM’s performance media unit Nexus, which includes several programmatic operations.
However, the timing of the cuts cannot be ignored, given the impact of the economic downturn on the number of people around the globe. These mergers were announced nine months ago, and there was plenty of time to make internal changes that had previously led to layoffs. According to one source with knowledge of the effects of the merger, some reductions occurred in late summer 2022, and the current reductions involve people not accepting realigned roles.
Separate sources with knowledge of the developments independently told Digiday that staff were told that job cuts were to take place this week, and that further realignment decisions will emerge in the next month. The cuts have already begun in the UK and other regions across Europe, the Middle East and Africa, and North American layoffs are said to be happening today.
GroupM employs around 42,000 people worldwide, and while it is understood the reduction in headcount has been planned for some time, the decision is likely to have been influenced by recent setbacks such as the loss of big-spending clients such as L’Oreal and Direct Line Group. .
“We can confirm that we had several conversations today,” said Jared Baiman, GroupM’s associate director of global corporate communications. “We are not going to comment on the number of people affected. Those conversations are still ongoing.”
Baiman declined to elaborate further. And it is not specifically clear which agencies are within the portfolio of the holding group, or the departments, they were affected by the restructuring. Meanwhile, a former GroupM executive who still has direct contact with insiders there told Digiday that the downsizing involved several senior executives parting on mutually agreed terms. That was backed up internally by a senior GroupM executive, who said this is more about the “hygiene” that often happens at this time of year, including letting go of underperforming employees.
News of the GroupM layoffs comes in a week when Big Tech players were reported to be making more layoffs, with Amazon and Microsoft also saying they are cutting thousands of roles respectively this week.
Amazon and Microsoft are understood to be largely unaffected by their respective media operations, as such units are said to be growth drivers for the pair. Meanwhile, separate sources within GroupM have insisted that the number of employees in the current round of layoffs is nowhere near the scope of recent technology cuts.
Such cuts likely reflect how companies in the digital economy now have to compensate, or “right-size,” after continuing to hire sprees as economies begin to recover after of the Covid-19 pandemic in late 2020 and early 2021.
Later, GroupM cited a potential slowdown in digital media spending growth as it downgraded an earlier growth forecast in the global advertising business during 2023 – 5.9% compared to its earlier estimate of 6.4% in June.
Meanwhile, the widely expected economic downturn is reverberating elsewhere in the digital economy, with independent companies similarly implementing restructuring that has resulted in scores of job losses in ad-tech sector.
Seb Joseph, Digiday’s senior news media editor, contributed reporting to this story.