We’ll never be in this together until we realize that layoffs cannot be the normality in this business. Yeah this is a special time. But how come we’ve accepted to have layoffs all the time even when everything was ok?

likesmart
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Most clients have not stopped spending. This is a shock doctrine approach by the holding companies to reduce costs, raise their share prices, so that they get rich at our expense. Yes the power is in the hands of the employees. We leave the holding company agencies and go start our own places, the clients follow us. if everybody learns to avoid holding company fees and sees, everything will go much better research advertising in the 1970s. Little 10 person shops sprouted up everywhere. Everybody was happier. Then holding company started buying the shops and consolidating them. Think Chiat day, amurati -puris, McCabe and co. Oh and a little ship started by two guys names Kennedy and wieden. You do not have to work at a holding company agency it’s not the law go find independent shop in your city and work there. If they can’t hire you, start your own. This is already starting to happen. The creative team from Peru who were working at McCann New York started their own shop this year , LC, and are doing great.You are creative people. Take control of your own fate.

likesmart

Most clients where? Your agency? That could be true for you then but it’s untrue of the industry.

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Uh I don't know about you CD2, but a lot of clients have cut spending. I've seen the balance sheets and the risk analyses. That's precisely what happens when money gets tight: marketing goes out the door first. Same as it ever was.

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They aren’t secretive. I’ve just never met a CD whose eyes didn’t glaze over during development meetings.

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Tons of clients have cut spending dramatically; Retailers, restaurants, airline, hospitality, events, oil,

No budgets= no work = no need for staff.

Should companies should keep employees even if no work. Pay you to do nothing. Take the margin hit. Report losses to the stockholders. Maybe. Maybe not.

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This is a special situation and ok but when it’s business as usual. Yeah the business is changing and bla bla bla but those who pay the most are always the creatives and never the top leadership.

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If the higher ups didn’t take all the profits as bonuses then they would have some money for a rainy day. But greed is a powerful vice.

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Not really higher up. Just in title.
Titles are free to give out.

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Of course it’s the norm—because of the nature of the business—it’s always changing. If you lose a $10 million account, there’s really no reason to keep the people that worked on that business. You can always go client side. I see more agencies keeping a core staff and using freelancers.

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Staff is based on hours which is based on fees. How would one scale staff down along with fees, other than layoffs?

How agencies make money, simplified version:

- by selling outputs or hours to a client

- subtracting the cost of those hours (salary/benefits) or outputs (third party vendor costs, etc)

- subtracting the cost of overhead (building rent, non-billable staff salary, trips to Cannes, paper, bonuses, in-house gym, taxes, insurance, etc)

= profit left over

= reports that profit to shareholders = dividends

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Correction: TC 51.3 has 15% variable.
Experience: 11 years (Marketing & Brand Manager)

Location: Bengaluru, Karnataka

#mba #marketing #branding #layoff

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