Advertising agency giant Omnicom’s $9 billion merger with fellow ad firm Interpublic Group officially got over the line last week. Now come the “synergies.”
Omnicom CEO John Wren said in media interviews on Monday that the total number of acquisition-related layoffs is expected to reach 4,000, with the majority of jobs to go by the end of December. A spokesperson confirmed the figure.
The layoff accounts for about 3% of the company’s combined head count of 128,200 as of the end of 2024, based on their regulatory filings.
Since the deal was first announced late last year, IPG has already shed 3,200 roles, while Omnicom has had about 3,000 job cuts. Omnicom last year set out a “$750 million cost synergy target” related to the merger.
The new Omnicom is now the largest advertising agency group in the world, with combined annual revenues exceeding $25 billion. By merging, Omnicom-IPG can reduce operating costs by consolidating systems. The new company can also leverage its collective client ad spending from the world’s biggest brands to negotiate better deals with media owners and tech platforms.
“Together, we will be the go-to company that shapes how brands grow, people connect, and culture evolves,” Omnicom chairman and CEO John Wren said in a statement.
Madison and Wall, an advisory and consulting firm, wrote in a research note on Monday that Omnicom’s success in managing both people and clients through the transition would determine whether a significant number of advertising contracts are put up for review.
The consolidation of the two companies will result in the retirement of storied creative agency brands DDB, FCB, and MullenLowe, the company said Monday. The newly formed Omnicom Advertising division will operate three creative agency networks: BBDO, TBWA, and McCann.
Omnicom announced its new company structure on Monday, which will consist of these main divisions:
- Omnicom Media — with agencies including Hearts & Science, Initiative, Mediahub, OMD, PHD, UM, and Acxiom.
- Omnicom Public Relations — including FleishmanHillard, Golin, Ketchum, Porter Novelli, and Weber Shandwick.
- Omnicom Production — including Content Solutions, Production Management, and Studios.
- Omni and Flywheel Commerce Network — including Omni and Flywheel.
- Omnicom Advertising — BBDO, McCann, TBWA, and the US Advertising Collective.
- Diversified Agency Services — comprising health marketing companies Healthcare Professional & Consumer, Medical Communications, Patient Engagement, and Managed Markets; branding agencies Interbrand, Siegel+Gale, Sterling Brands, and Wolff Olins; and Precision Marketing, including Credera, Critical Mass, and RAPP.
Read the original article on Business Insider
The post Ad giant Omnicom says its mega-merger with IPG will lead to 4,000 job cuts appeared first on Business Insider.
