Some WPP employees are worried for their jobs as 3 agencies merge. They just got a powerful reminder of why change might be necessary.
Some WPP employees are confused and worried for their jobs after a report that the ad holding company planned to absorb three more agencies into the Wunderman Thompson network. No large-scale downsizing moves are expected, but at least some executives were laid off or left the company in recent weeks. The Forrester analyst Jay Pattisall called the consolidation necessary to simplify the organization and compete more directly with upstarts and consulting firms that offer multiple services under one roof. This week, in an example of that threat, Accenture Interactive won a major chunk of Kimberly-Clark's global baby-care business, which had been with WPP. Click here for more BI Prime stories.
A week after Business Insider reported on forthcoming consolidation moves at the ad-holding-company giant WPP, some sources are confused and nervous about their jobs. Multiple sources confirmed that Wunderman Thompson would absorb digital agencies Possible, iStrategyLabs, and Mirum in North America, though the latter may retain its name in certain locations, like its San Diego headquarters, to avoid disrupting a relationship with its largest client, Qualcomm. Exactly when the brands will merge, and whether a global consolidation will follow, is unclear, and Wunderman Thompson leadership has not communicated plans to employees. Sources told Business Insider that no large-scale staffing changes would accompany the consolidation. But at least some high-level staff members have recently been laid off, and others expressed jitters about their job security. Wunderman Thompson declined to comment. Some jobs were recently eliminated, and leaders were hired, as Wunderman Thompson's North American framework takes shape An executive who was recently laid off said Wunderman Thompson's financial department has begun reviewing salaries in an effort to bring costs down. Another person said leaders sent a message around their office about the Business Insider article before it went live and that a manager said layoffs could follow. Describing the general mood as "confusion" and "anxiety-filled," this source said that at least three executives have left the office over the past four months and voiced frustration that WPP was not communicating more. A second former executive said some recent cuts focused on back-office jobs and that multiple current employees have "reached out in mass confusion" over the past week. To be sure, it's common for ad agencies — especially ones going through large-scale restructuring — to trim staff around the holidays to keep severance expenses on the current year's balance sheet. Wunderman Thompson has also been hiring and promoting new leadership. The network recently named a new North American chief creative officer and the president of its office in Minneapolis, which is home to its longtime client Best Buy. Over the summer, it also officially split into Eastern, Central, and Western divisions led, respectively, by the former Possible executive Joe Crump, Wunderman Chicago President Ian Sohn, and Liz Valentine, the CEO of the boutique agency Swift. Some C-level roles were eliminated in the process. A third executive who recently left WPP said Swift was excluded from the larger consolidation, at least in part because of a client conflict: The Portland, Oregon-based shop works with Google, while competitor Microsoft is one of Possible's largest clients. The move comes as consulting firms are finally starting to win creative accounts away from holding companies The third former executive called the consolidation smart but argued that it should have happened two or three years ago as WPP is now "fighting from behind" to compete with consulting firms. The Wall Street Journal reported this week that Accenture Interactive had won lead creative duties for Kimberly-Clark's childcare portfolio in the US, Europe, Middle East, and Africa — work that WPP previously had. It was the firm's first major new-business victory since acquiring creative agency Droga5 in April. Forrester chief analyst Jay Pattisall told Business Insider that Accenture won by selling its tech and strategy consulting acumen and Droga5's creative as a single package. "Wunderman has a similar capacity on the digital and strategy side, and with the creative chops inside JWT, Possible and, to an extent, Mirum, I think [the consolidation] is a competitive play in that regard," he said. The third former WPP executive said firms like Accenture and Deloitte don't need separate divisions to pitch clients because their appeal lies in being all things at once. He referred to the concept of branded specialty agencies as "a self-inflicted wound" that makes holding company offerings unnecessarily complicated. According to Pattisall, the big question is whether these networks can simplify fast enough to stay competitive with the upstarts and the big consultancies.Join the conversation about this story » NOW WATCH: A podiatrist explains heel spurs, the medical condition Trump said earned him a medical deferment from Vietnam
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