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Which agencies are going through layoffs
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Layoffs happen before a key financial reporting time. Usually EOY but can happen before the start of 2H or a new quarter. Especially if a holdco agency, leadership has numbers to hit. If they miss them, their bonuses are reduced considerably.
Rising Star
It’s a very complicated situation. And each region or country may have its own separate factors. We are still dealing with the whiplash effects and long term consequences of Covid. The supply chain problems from crazy increases in demand at the same time as shortages of goods created worldwide inflation. To counter this, many countries have raised interest rates (not just the US) to put the brakes on runaway inflation. With high interests investment is stalled because of the price of borrowing money to expand businesses. Meanwhile, agencies have been able to make do with less, because their clients are asking for less work and are lowering retainers. But profit wise, the agencies have actually been doing ok as far as profits, because a lot of that has come from squeezing more out of their employees and from cutting costs by having layoffs.
That’s the short version of it.
Throw in the AI bubble that is making people believe all sorts of crazy shit about not having to hire as many people in the future, so they invest what little money there is available in AI garbage that isn’t necessarily making anything more efficient or cost effective (but that some people think will improve with time).
Also, election year in the US and the results could have a huge global implications depending on who wins.
Rising Star
The industry is massively contracting and leadership is pretending it isn’t to keep morale up and their bonuses.
Huge scopes that should go to one agency are being split off multiple agencies. Existing scopes are being cut 10-20% after being cut again last year.
Director and VP level staff are having to take on juniors work. It’s a mess.
Yes - it’s been a growing trend over the last 15 or so years. It gives clients more flexibility to drive down costs but squeezes agencies into driving performance with fewer resources. This usually means more junior (cheaper) talent.
Two words: shareholder value.
Holding companies don't care about the talent. They're focused on having positive quarterly earnings reports.