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Top PR firm Weber Shandwick started furloughs and layoffs as clients like Royal Caribbean and AB InBev cut spending — read the CEO's internal memo

Gail Heimann Getty
  • Weber Shandwick, one of the world's biggest PR firms, began furloughs, layoffs, and other cost-cutting measures today.
  • PR has so far been less dramatically affected by the coronavirus pandemic than other marketing services, but Weber Shandwick clients like Royal Caribbean and AB InBev have slashed their spending.
  • According to a Weber Shandwick employee, the firm's consumer team, which handles packaged goods and travel clients, was particularly affected across multiple offices.
  • Parent company IPG has made cuts in recent weeks.
  • Click here for more BI Prime stories.
Weber Shandwick, part of ad holding company IPG and the world's second-largest PR firm by revenue, began making furloughs and staff cuts this week.
Public relations has been less affected by the coronavirus pandemic than other marketing and communications services, but the firm's major clients like Royal Caribbean and AB InBev have cut spending.
Weber Shandwick employs between 4,000 and 5,000 people globally. It's unclear how many were affected by the cost cuts.
According to a Weber Shandwick employee who is known to Business Insider but requested anonymity in the interest of job security, the firm's consumer team serving packaged goods, travel, and hospitality clients was hit particularly hard across multiple offices. The employee also said at least one senior-level executive on the firm's corporate team was laid off last week.
CEO Gail Heimann sent a memo to staff today that is reprinted in full below.

Employees began receiving furlough and layoff notices today

Weber Shandwick's human resources department began holding video conference calls with people today to tell them how their jobs would be affected. They were then sent materials like an official status letter and a summary of benefits.
"This is a crisis unlike any we've seen," Heimann wrote in a statement. "Unfortunately, our industry and our business are not immune to the economic fallout the pandemic is having around the world. While all of these decisions have been incredibly hard, parting ways with Weber Shandwick employees is the single most painful decision we've had to make."

Crisis PR services are in high demand as companies scramble to manage the pandemic, but demand for consumer work has declined 

Some PR firms have benefited from the pandemic as businesses seek help managing internal and external communications, and ad holding companies have seen PR perform better than traditional marketing.
WPP's PR revenue declined by 4.4% in March while ad agencies and firms that specialize in services like event marketing dropped 6.6% and 15.2%, respectively. Omnicom recorded 0.2% organic growth for its PR division during the first quarter of 2020, while ad agencies' declined by 0.1%.
IPG CEO Michael Roth said on an April 22 earnings call that demand for PR services remains strong.
Still, top firms including Edelman, Ketchum, and Fleishman Hillard have reduced pay and cut staff.
IPG has cut and furloughed staff at several agencies since the outbreak began.
Read Heimann's full memo below.
Important Agency Update.
Hi. I don't want to mince words or bury the lead. Today is a sad day for Weber Shandwick.
We have to part ways with a number of colleagues from around the network, people who have made good things happen for our firm and clients. People who are friends.
It is something I hoped I would not have to do; it is a wrenchingly hard decision to make. And I know it is indescribably hard for those to whom we are saying good-bye.
In addition we are furloughing some members of our team and asking others to move to a reduced schedule until the business environment improves. 
I want to tell you how we got to this place and give you a sense of where we are going from here.
I've shared in other emails and at Live Show meetings that, like many of our clients and every organization in our industry, we have felt the impact of the pandemic. Today, a little over four months since we first heard about COVID-19 and eight weeks since the majority of our population began working from home, we continue to experience client pull-back across various sectors. That pull-back is mirrored on the new business front as many companies are putting plans for new assignments and agency searches on hold. Together, these forces are conspiring to inflict additional downward pressure on our business.
We took early actions to help protect our business and our people. Our senior pay cuts and other cost reductions – limited hiring, salary freeze, expense reductions – allowed us to delay and diminish the actions we are taking this week, but, unfortunately, not eliminate them.
It is my job – and that of our leaders around the network – to protect our business – to do everything we can to ensure stability this year and put our firm in a position to thrive and grow in years to come. The core of our business remains strong as does our commitment to work tirelessly to protect as many jobs as possible as we navigate towards and through the many phases of recovery. I hope that minimal further steps are required.
The colleagues leaving Weber Shandwick have been a part of a culture of caring. We are working to support them, extending health insurance benefits and offering professional career assistance as appropriate.
My thanks to them for their many contributions to what we are. They are incalculable.
My thanks to all of you for everything you're doing – defying the distance between us to make extraordinary and important work, defying tough personal circumstances and the worst global crisis I can remember or imagine to "be there" — from wherever you are — for each other.
You made it very clear in our recent employee survey that you wanted frequent and transparent communications. So I will continue to update you on our business realities – the good, the bad and sometimes, like today, the very painful. I am beyond grateful for your continued support and partnership as we navigate these very difficult and challenging times together.
Please stay well.
Gdh
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SEE ALSO: Ad giant Publicis Groupe and data firm Epsilon cut staff in the US as clients like Disney and L'Oreal slash their marketing budgets
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