Interpublic Group of Cos. announced layoffs of 3,500 employees and said it will close or merge more than 75 facilities by year-end. The move came as the Group reported a quarterly net loss and lowered its full-year earnings target.
Job cuts are in addition to the 2,200 people Interpublic said it cut in the first half of this year; the combined cuts represent 10% of its worldwide staff.
The company said 90% of the staff cuts have already been made or that staffers were already notified. Chief Financial Officer Sean Orr said: "We feel [this is] already behind us."
The world's largest ad agency holding company posted a second-quarter net loss of $110.2 million vs. net income of $166.4 million a year earlier. Interpublic lost 30 cents a share in the recent quarter, vs. diluted earnings per share of 45 cents a year ago. Revenue fell 4.3% to $1.74 billion; U.S. revenue dropped 7.3%. Results for this year and last year include True North Communications, acquired in June for $1.7 billion in stock.
Speaking with analysts in the second-quarter earnings conference call late July 26, Interpublic executives said the company will take $500 million in 2001 restructuring charges as it moves to cut costs. Of that, $375 million comes from cost-cutting efforts, including severance payments.