The coronavirus (COVID-19) pandemic has dealt a devastating blow to the U.S. public relations industry, resulting in client reductions across the board and plummeting revenues that have agencies of all sizes cutting staff to make up for the losses, according to a new report by PR merger and acquisition consultancy Gould+Partners.

The Gould+Partners report, which sought to gauge the coronavirus’ current financial impact on the U.S. PR profession, found that overall, 88.5 percent of the agencies surveyed said they’d lost net revenues because of the COVID-19 crisis. More than a third—38 percent—reported losing at least 20 percent of their client revenues, and more than a quarter—26.4 percent—lost between 10 and 19 percent. Another quarter—24.1 percent—said they lost less than 10 percent.

Gould+Partners - Client Lost Net Revenues

Additionally, 85 percent of firms said they’d been forced to suspend client work as a result of the outbreak. More than half of firms surveyed—57.5 percent—said they’d also had clients terminate contracts.

On average, nearly one in six firms polled—14.9 percent— said they’d been forced to terminate staff to some extent. 13.8 percent of firms reported furloughing some employees (defined here as no or a partial salary but with continuing benefits), while 5.7 percent said they’d laid off staff. Nearly one in five—18.4 percent—said they’d instituted mandatory pay cuts.

“My prediction, based on conversations with CEOs of very established firms, is that there will not be any firm in North America with net revenues of at least $3 million that will not show a loss of net revenues,” Gould+Partners managing partner Rick Gould told O’Dwyer’s. “I believe the stats will only get worse in the coming weeks. Hopefully the recovery will start in Q3 of this year.”

Almost all the PR firms surveyed—92 percent—claimed they’d already filed for the Payroll Protection Plan, the government-sponsored coronavirus relief package for small businesses. To date, however, only 17.5 percent reported receiving any funds.

A previous Gould+Partners report found that 90 percent of the agencies polled said they planned to apply for a small business loan under the CARES ACT loan program.

The Gould+Partners survey included comments from agency CEOs, one of whom—from an agency located in the New York City metro area with between $10 million to $25 Million—said “If the PPP does not come through we will commence layoffs/furloughs.”

Another agency CEO—this one from an agency in the northeast, with between $3 million and $10 million in revenues—said that “We’re down to the wire with funds coming in from clients, and won't be able to keep going with everyone on staff for much longer without paused programs getting started again.”

Gould+Partners’ “Coronavirus Financial Crisis Report” surveyed 87 anonymous firms across the country between April 13 and 16. Agencies surveyed earned revenues ranging from less than $3 million to more than $25 million.