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Ad giant Publicis Groupe and data firm Epsilon cut staff in the US as clients like Disney and L'Oreal slash their marketing budgets

FILE PHOTO: Arthur Sadoun, Chairman and CEO of Publicis Groupe, attends a conference at the Cannes Lions International Festival of Creativity, in Cannes, France, June 19, 2018.  REUTERS/Eric Gaillard/File Photo
  • Publicis Groupe began reducing staff across its US agencies this week after major clients like Disney and L'Oreal slashed their ad budgets.
  • Agencies have responded with a combination of salary cuts, reduced hours, and layoffs in the mid-to-low three digits.
  • Its data firm Epsilon eliminated a small number of jobs in April and is expected to go through another round of cuts next week.
  • Publicis is the last of the major holding companies to reduce staff in the US due to the economic effects of the coronavirus.
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Ad holding company giant Publicis Groupe began an extended round of staffing reductions at its US agencies this week, sources said, as the effects of the coronavirus continue to cut through the advertising industry.
Publicis agencies have been making a combination of salary cuts, reduced hours, and layoffs, with its data firm Epsilon most directly affected. The cuts were by confirmed by four people who have direct knowledge of the cuts, three of whom are current Publicis employees. All are known to Business Insider but requested anonymity because they aren't authorized to discuss the matter.
Publicis has taken a hit as clients including Disney's parks division and longtime client L'Oreal have slashed spending. Publicis leadership previously said that hiring freezes, delayed dividend payments, salary cuts among board members, and its project management platform Marcel would help minimize reductions in the US.
Total layoffs across the holding company are in the low-to-mid three digits, according to two of the four people, both of whom help manage Publicis Groupe's internal operations. Publicis Groupe employs about 25,000 people in the US.

Data firm Epsilon will go through two waves of cuts

Agencies that cut staff this week include BBH, Publicis Sapient, Digitas, and Rokkan. The latter firm is being folded into Razorfish, which also went through a round of layoffs. Some agencies had no layoffs.
Two people said Epsilon cut a small number of jobs in April, and a LinkedIn post confirmed that the company's auto marketing division eliminated at least one executive-level position.
One person said the company is "still shell-shocked" but will make more cuts beginning next week.
Publicis acquired Epsilon in April 2019 for more than $4 billion.
"Like many organizations, Epsilon is exploring all cost saving options to protect jobs and anything that impacts our people directly is our last measure," said an Epsilon spokesperson in a statement. "We're incredibly proud of how our teams have navigated the uncertainty as they continue to come together for each other and our clients."

Publicis is the last major holding company to reduce staff in the US

Ad holding companies including WPP, Omnicom, Dentsu, and MDC Partners have made significant cost-cuts over the past two months, including furloughs, layoffs, and voluntary salary cuts.
Three weeks ago, Paris-based Publicis confirmed that it would cut some of its about 5,000 UK employees. Two people confirmed that executives at some of the US agencies took voluntary six-month pay cuts.
According to one person, plans for the layoffs started in late April.
Got more information about this story or another ad industry tip? Contact Patrick Coffee on Signal at (347) 563-7289, email at pcoffee@businessinsider.com or patrickcoffee@protonmail.com, or via Twitter DM @PatrickCoffee. You can also contact Business Insider securely via SecureDrop.
SEE ALSO: The New York Times head of advertising says layoffs are 'likely' due to a decline in ad revenue — read the internal memo
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