Updated: MPG Cuts 50

NEW YORK Havas’ MPG laid off approximately 50 staffers on Wednesday, or about 11 percent of its U.S. workforce, across offices including New York, Boston and Chicago, according to sources.

The cuts were imposed three months after the arrival of a new North American CEO, Shaun Holliday, who replaced Charlie Rutman on Jan. 1. (Rutman remains a consultant to the agency). Insiders said Holliday, who has a financial background with no advertising or media agency experience, had been planning cuts since shortly after he arrived.

Holliday, 50, has held senior posts at several major consumer-focused marketing companies. Most recently, he was a CEO-in-residence at Gryphon Investors, a leading private equity firm. Previously, he served as president of new business and innovation for Newell Rubbermaid, president of international for the Pepsi Bottling Group, CEO of Diageo’s Guinness Ireland Group and general manager of Frito-Lay’s direct division. He also has served as CEO of two technology startups, eMac Digital and Living.com. 

Holiday could not be immediately reached for comment.

In a statement, MPG confirmed cuts were made but offered few details. “MPG today announced the steps it has taken this week to streamline U.S. operations,” the statement said. It cited “economic conditions and the need to free up resources to fund growth” as the primary factors for the cuts, which it said “primarily” affected its headquarters in New York.

In that statement, CEO Holliday said: “We are experiencing good momentum in the marketplace due to our recent successes expanding core client relationships and winning new business. Cost reduction initiatives, such as those announced today, are not about shrinking the business into a more profitable core — on the contrary, they are about funding and fueling growth.”

At the end of 2008, MPG said it had 460 U.S. staffers, meaning that the cuts would reduce that total to about 410. The shop posted revenue growth of 7 percent in 2008, according to Adweek research, which was below the industry average of 11 percent.

MPG is the latest in a long line of shops and holding companies to lay off workers as a result of the recession. One of the agency’s biggest clients, Sears Holdings, parent of both Sears and Kmart, spent $590 million on ads in 2008, or $100 million less than it spent the previous year, according to Nielsen.

This story has been updated with MPG’s statement and Holliday’s comments.


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Publish date: April 1, 2009 https://stage.adweek.com/brand-marketing/updated-mpg-cuts-50-98761/ © 2020 Adweek, LLC. - All Rights Reserved and NOT FOR REPRINT