As the COVID-19 crisis continues to shake the marketing and communications industry, New York’s public relations sector has endured its worst impacts, experiencing more employee layoffs and lost revenues than anywhere in the country, according to the latest industry survey conducted by PR merger and acquisition consultancy Gould+Partners.
Gould+Partners’ report, which surveyed nearly 140 PR firms, found that 13 percent of PR agencies located in the New York City metro area have laid off staff due to the COVID-19 crisis.
Firms in Southern California came in second, at 11 percent, followed by Washington, D.C. and its surrounding suburbs, at 10 percent. Firms in the U.S. Northeast, Southeast, Midwest and Southwest reported relatively low layoff numbers. No layoffs were reported among the surveyed firms based in Northern CA, the Northwest or Canada.
More than a third of New York-based firms (38 percent) also said their agency had instituted mandatory pay cuts, compared to 33 percent of firms located in Southern CA and 27 percent of those based in the Northeast.
A fifth of D.C. firms (20 percent) reported mandatory pay cuts, followed by 17 percent for firms in both the Midwest and Northwest. The Southeast, Southwest and Northern CA regions reported the fewest mandatory pay cuts, at 14 percent, nine percent and six percent, respectively.
|New York’s PR industry has witnessed more salary cuts and layoffs than anywhere in the country.|
New York PR agencies also led the nation in terms of lost revenues. More than a third of NY firms polled (36 percent) said they’ve had clients request that their work with the agency be put “on pause” because of COVID-19. Nearly a fifth (19 percent) additionally said clients had requested reductions in retainers or projects, and 18 percent reported they’d had clients terminate contracts.
D.C.-area firms come in second for having PR work put on hold (32 percent), followed by firms in Canada (21 percent). On the other hand, Washington D.C. led as the area of the country to see the most reductions in retainers or campaigns (26 percent), followed again by Canada (15 percent). Firms in the Northeast, Southwest and Northern CA followed New York in terminated contracts, all at 16 percent.
According to the survey, 90 percent of New York-based PR firms reported that they’ll be applying for a small business loan under the CARES ACT loan program.
“The coronavirus crisis has had a devastating impact on the New York City travel sector, as well as sports/entertainment, consumer and even tech,” Gould+Partners managing partner Rick Gould told O’Dwyer’s. “With hotels at 15 percent occupancy, Broadway shut down, sports arenas dark and consumers in isolation, with few financial and tech pros commuting into Manhattan… it makes sense that these specialties are suffering.”
The lone bright spot, according to the report, is that about one-in-five New York agencies surveyed (20 percent) reported that their crisis and healthcare practices had financially improved in the wake of the COVID-19 pandemic.
Gould+Partners’ latest findings come in the second installation of its “Coronavirus Financial Crisis Impact” report, which seeks to analyze COVID-19’s financial affects on the PR profession. Findings were based on the responses of CEOs from 136 PR firms across North America at the beginning of April.