|January 19, 2009|
|Dire Forecasts Lead to Cuts Despite 'Best Years Ever'|
|By Greg Hazley|
|Winning business and record revenue aren’t what they used to be.|
With PR staffs and budgets being pruned across the country, it’s worth noting how many PR firms are retrenching on forecasts for ’09 doldrums, not necessarily from tangible revenue slumps. A doctrine of preemption has spread throughout the PR industry.
Some firms are even swinging the ax despite what they say were record numbers in 2008.
Capstrat fired six staffers in December, but senior VP David Catham told the Raleigh-News Observer that ’08 was the firm’s “best year ever” for revenue.
Last week, Pennsylvania’s Jack Horner Communications said it would shutter its Pittsburgh office and consolidate in Philadelphia. That move came despite both offices putting up their best years in the 17-year-old firm’s history. Horner told us he’s acting now (sub req'd) because of dour expectations for ’09.
Cleveland’s Dix & Eaton, which had a round of layoffs last week, said it retained more than 90 percent of its clients last year, but trimmer budgets led to the staff cuts.
“We competed for new assignments, won them, and then had the assignment put on hold,” CEO Scott Mr. Chaikin told Crain’s Cleveland Business.
GolinHarris, which has implemented cost-cutting moves alongside other Interpublic firms like Weber Shandwick, said in an internal memo announcing the postponement of salary reviews earlier this month that the firm was putting off raises despite wrapping one of its best financial years in its 50-year history.
Unfortunately the conglomerate firms aren’t talking numbers when it comes to staff reductions. The layoffs we’ve heard and read about so far have been light -- most fewer than a dozen -- compared with the carnage of 2001. Consider that in the first few months of 2001 alone, Ogilvy PR whacked nearly 100 staffers, Brodeur slashed 90 (although it also lost IBM business), the former Morgen-Walke cut loose 35 executives, and Citigate Cunningham pruned 20.
Let’s hope things don’t get as dark as those days.
Return to Latest News