Enfatico Layoffs Part II
February 25, 2009
As of yesterday there was about an 8% reduction of 1000 employees at the advertising agency, basically 80 people have been fired over the past 24 hours. Now we have been told by 3 senior level officials at the company that this is “once and done” and that no other layoffs are expected. The problem we have with this is that Dell informed Enfatico a month ago of this action. In fact Dell told Enfatico that they are cutting big parts of their advertising budget.. My friend at CBS / B|Net Jim Edwards called them out on this.
“Dell’s spending on SG&A has declined 12 percent over the last year. In Q3 it spent $1.6 billion. That was down from Q2 when it spent $1.8 billion. And that was down from Q1 when it spent $1.9 billion. It’s a pretty good bet that Dell’s Q4 earnings, out in a couple of days, will show another decline in the budget.”
So an 8% reduction in staff for a 12-20% reduction in spending (just wait after Q4 is released) doesn’t add up.. not by a long shot.
There’s no good answer to this… It could mean that Enfatico was overstaffed by huge numbers *on Dell’s tab* prior to the layoffs… or that this is just round 1 of *a continued layoff process*.
There is no other way to answer this.. either “we over billed Dell big time” or “we lied and more layoffs are on the way” .
The reason Enfatico can be “called out” is because it’s a single client ad agency, meaning just look at Dell’s financials to tell you what is going on at Enfatico. Numbers like this can (and normally are) hidden by other advertising agencies because they have other clients they can claim they are receiving funds from. Currently Enfatico has no such crutch.
So what’s the answer?
Enfatico Layoffs
February 24, 2009
We will not comment on this developing story until we get official word from the Advertising Agency.
We have been hearing “several .. to several dozen .. to hundreds” … we doubt the hundreds level… because that would mean effectively a shut down of the agency. No on has facts yet, we will get the official story shortly.
—-Edit This was just published on their blog —
To the Global Enfatico Team:
Today, we announced a proposal to restructure our team and decrease our workforce by
approximately 8 percent. This difficult decision is a direct result of the global recession and
pressures affecting virtually all aspects of the economy, especially the technology sector. Dell
has continued to proactively manage its operating expenses, including marketing expenditures,
to map to these new realities. In turn, we must streamline our business to adjust for these
unprecedented economic times.
While these proposed actions will undoubtedly apply new pressures on our young agency, it is
critical that we remain focused on teamwork, support and possibility. The best organizations
come together during times of difficulty and often emerge stronger when the storms pass. We
must stay unwaveringly committed to Dell and its business results — our unique partnership
will be a source of strength for both organizations.
We must also focus on building a successful business on behalf of WPP’s shareholders. For each
of us, this means maximizing our productivity, making practical choices and taking steps both
large and small to reduce costs. It also means an aggressive drive to win new clients and
diversify our portfolio. We have several new business pitches in the works, and we are hopeful
to announce some positive news on this front soon.
I know you will have questions about what this means for our agency. I encourage you to share
your questions and feedback with your manager, leadership team member, or directly with me.
I value your perspectives.
We all joined Enfatico with a sense of entrepreneurialism and opportunity –– with the
conviction that there is a better, more effective way to deliver strategic marketing services.
Despite the challenges ahead, I remain inspired by this vision and each of you who help bring it
to life on a daily basis. Thank you for your passion, commitment and great work.
All the best…
Torrence
11 Madison Avenue, 12th Floor, New York, NY 10010
WPP group plc London - New Round of Major Layoffs
February 14, 2009
We have it on good notice that WPP Group plc London will be having some severe layoffs, big time. We do not have a figure yet, but so far the figures have stated “hundreds”. We have had 3 confirmations (all unsolicited) that layoffs are in the works and in some instances they have already started on Friday… but the bulk of these will take place next week. We have been unable to verify the exact number of firings on Saturday when this report is being written.
In the words of one of the tipsters “London is in a turmoil”.
The problem is we were told that management has been planning these layoffs for roughly 6 weeks now, and from what we heard “the condition has considerably gotten worse since when planning was initiated, meaning these layoffs are not going to be the last one.. not by a long shot”
This is bad people, really bad. This recession is 2 inches away from being a full blown depression, and that is already being debated.
Crispin throws employees under the bus - literally
February 12, 2009
From reports sent to us by former Crispin Porter + Bogusky employees, plans to still include Domino’s pizza on demand, free snowboard rentals and “disruptive thinker travel” in the form of a Wi-Fi-equipped biodiesel company bus that runs regular routes around Boulder. These expensive projects will continue, but not for the 60 people fired from the advertising agency as we reported on the 5th.
Crispin Porter + Bogusky has not replied to our request for the costs associated with with the pizza on demand, free snowboard rentals and the apparently expensive Wi-Fi-equipped biodiesel bus and if jobs and family livelihoods were sacrificed to keep those perks.
That’s the bus, and under it you will see their employees… read the note on the coffee cup the Colorado Independent took at Crispin Porter + Bogusky’s HQ in Colorado.
threw their employees under the bus - literally.
No Ad Agency Job and no it’s not going to turn around.
February 8, 2009
“I’ve been out of work for about 5 months now and it’s very frustrating. I spend most of my days submitting my resume to the various online job boards, directly to Agencies and talking to recruiters, but nothing. I love advertising and I don’t want to give it up, but I have a family to feed, clothed, housed etc. I’ve applied to other jobs outside of advertising/marketing and still nothing. I am at my wits end and I have to keep a positive attitude otherwise I don’t know where I would be. I hope the economy bounced back sooner rather than later, because otherwise most of us will be out on the streets.” — was a reply to Matt @ Media Bistro’s post regarding “You’re Out of Work”
We feel for this guy and other several dozen that have replied to that post. We told you back in 2006 that this was going to happen. With our initial press release.
It’s not going to “turn around” ad agencies are not going to “start hiring” again… in fact it looks like it’s a structural problem… not just a purely economic one. Structural unemployment is long-term and chronic unemployment arising from imbalances between the skills and other characteristics of workers in the market and the needs of employers. It involves a mismatch between workers looking for jobs and the vacancies available often despite the number of vacancies being similar to the number of unemployed people. (wikipedia)
The reason I am saying that that Advertising Agency model is broken, and it is a structural problem. Much of the Advertising Agency resources are geared towards TV, Yellowpages, inserts in your newspaper, full page ads in the trade magazines. These are dying industries… literally dying. The Tribune filed bankruptcy, the other papers are virtually on their last year`or two before they follow suit… they resorted to shrinking the size of their paper because the limited advertising their clients are buying. Even Google dropped the traditional print buys from Adwords… meaning that Google feels there is no money in this.
Advertising Agencies are getting a double whammy right now. The first being the overall economy is horrific to say the least, the second is this massive structural problem where 90% of the individuals that work at advertising agencies work on the above listed media (making print inserts, full page color ads in magazines.. etc etc).
I’m trying to be as clear as possible, these layoffs will not stop for quite some time… and when they finally end.. the ad agency model won’t look even close to what it does today. The chances are this poor guy will never get his job back… and the problem is this isn’t his fault.
We make fun of BDA’s and their downfall, but guys like the one initially quoted are the ones feeling the pain. I personally would suggest to him to find another industry. Not because his work isn’t good… that’s not why he is on the unemployment line.. it’s because the model is broken that was working for. Somewhat similar to the .com crash… only their problem was all these services and no billing… whereas with the ad agencies it’s all these bills.. but no services.
This is almost like being a dialup internet provider when everyone is watching video’s on YouTube… there is a serious lack of bandwidth.
But this isn’t a “we told you so” … this is a very real problem affecting everyone… not just us individuals in Advertising. The overall unemployment rate in the United States is just shy of 14%. That’s right, 14% unemployment in this country. So what are your options? With an unemployment rate like that… the chances are that hundreds of people will apply to every job open.
Does this picture make sense to you?
Wunderman NY in process of firing people right now
February 6, 2009
Advertising Agency Wunderman NY is currently in the process of firing 10-20 - possibly more. Hits across the board reports Ad Agency Layoff on Twitter . This is unconfirmed as of yet and is the only source of the story.
It is not surprising however if true, layoffs and firings have been the norm for several months now during this depression. It appears that this economic catastrophe is hitting epic levels.
Each layoff continues to further depress the economy as these individuals are stripped of their ability to make mortgage payments, buy cars, products and pay for airline flights.
ugly people.. really ugly.
New Billboard marketing strategy from Wunderman
Ad Agency CP+B mails out 60 pink slips
February 5, 2009
Ad Agency Crispin Porter + Bogusky has laid off 60 of it’s employees noting the economy is bad according to Media Bistro These 60 employees are just a fraction of what’s happening overall in the economy. As hundreds of thousands of Americans are thrown out into the street each week, 10 million of us are sitting on unemployment.
What CP+B did is exactly what virtually every company has been doing, firing their staff in an effort to stay alive during this depression.
From their e-mail “we hope that we will not have to do this again.” … notice it’s not a promise… not even close. It’s a rough economy out there people, these 60 staffers will be dumped into a job market rife with double digit unemployment. Meaning their chances of finding a new job with similar pay are slim to none for quite an extended period of time.
His biggest problem is he’s coding websites in HTML….
Happy Layoff Day
January 26, 2009
Edit : about 3 seconds after this article was published, it was already outdated … Sprint Nextel just announced they are firing 8,000 people..
Layoffs galore today, tens of thousands of people were cut in the past 6 hours or so…. yes we know.. there is nothing to be happy about. Prior we were criticized for saying this is looking more and more like the great depression, so to nullify these objections we have titled this article “Happy Layoff Day”. The fact that these people have children at home, mortgages to pay for the roof over their head means nothing to these companies.
This is horrific by any measure, because thousands of people losing their job every day is the norm rather than the exception, and for every unemployed individual is another one that can’t buy a car from General Motors or buy something from Home Depot, in short these layoffs are circling back to bite them.
Thousands more jobs cuts were announced Monday. Pharmaceutical giant Pfizer Inc., which is buying rival drugmaker Wyeth in a $68 billion deal, and Sprint Nextel Corp., the country’s third-largest wireless provider, said they each will slash 8,000 jobs. Home Depot Inc., the biggest home improvement retailer in the U.S., will get rid of 7,000 jobs, and General Motors Corp. said it will cut 2,000 jobs at plants in Michigan and Ohio due to slow sales.
Starbucks fires another 1000 people
January 24, 2009
Another big round of layoffs is expected at Starbucks, possibly 1,000 people — a third of its headquarters employees — and some district managers and field employees, according to an e-mail sent to a stock brokerage’s customers Friday. The Seattle Times is reporting
We are supposing the 5 dollar cups of coffee are just too much in this economy…
It’s like a dollar per 1000 calories.
Mass Firings at Rubin Postaer
January 23, 2009
EDIT : George Parker has issued a retraction to this story, and it was our source of this article, so we have updated this post to reflect the retraction issued on George’s blog
The initial story that was published is listed below, but it’s accuracy is highly questionable considering the above retraction.
George Parker has the scoop “Major bloodbath next Monday at Rubin Postaer and Associates. More than one hundred people are expected to be laid off.” Ugly, really ugly. These people will be walking into a country wide “no hire zone” as there is a 4:1 ratio of unemployed individuals to jobs open.
These layoffs are to take place next Monday, it appears that the agency has not yet informed their staffers, and the individuals currently employed at Rubin Postaer are hearing this though blogs and news outlets.
How far do we have to walk to get away from this recession?
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