Media News

Omnicom cutting jobs as coronavirus hits ad spending by clients

April 28 (Reuters) - Advertising firm Omnicom Group Inc said on Tuesday it was cutting jobs and furloughing employees as the coronavirus lockdowns dent ad spending by clients.

Omnicom, which counts McDonald’s, Johnson & Johnson and Volkswagen as clients, said that stay-at-home orders and store closures led to the decline and added it expects the trend to continue for the year.

Omnicom, which did not disclose the number of job cuts, said a fall in revenue could hurt its operations and financial position, and the effects could be material.

“While we expect the pandemic to affect substantially all of our clients, certain industry sectors have been affected more immediately and more significantly than others,” the company said in a statement.

The health crisis has compounded the woes of Omnicom and its peers, which already face stiff competition from tech giants like Alphabet Inc’s Google and Facebook Inc as clients shift more ad dollars online.

U.S. rival Interpublic Group said last week it had cut salaries, implemented hiring freeze, deferred merit increases and furloughed employees - all to avoid job cuts as much as possible.

European rivals WPP and Publicis have taken similar actions to conserve cash.

Omnicom’s first-quarter revenue fell nearly 2% to $3.41 billion, but edged past analysts’ average estimate of $3.36 billion, according to IBES data from Refinitiv. (Reporting by Supantha Mukherjee and Neha Malara in Bengaluru; Editing by Saumyadeb Chakrabarty)