Goodway Group quietly laid off employees in 2 ‘rounds’ as it restructures to find future growth

Editor’s note: this story has been updated to include Goodway Group CEO Jay Friedman’s response.

Digital media agency Goodway Group has been laying off employees across multiple teams in the past year as part of an ongoing reduction of its workforce, according to multiple people that have been terminated. It’s not clear how many have been let go this year.

The New York-based agency let go around 40 staffers around mid-2023, and another six had their positions eliminated in January, according to a source that worked there for more than seven years. Goodway Group offers expertise in data and technology across its digital media and marketing services with some 490 staff in the U.S. and U.K., per Pitchbook.

“The big layoff was a surprise,” the source told Digiday about last summer’s layoffs – especially because the firm had “survived the pandemic” with no major cuts prior to that. When they asked at the time how many others were affected, the company did not specify. Those impacted received a generic email from leadership about the downsizing. The source also had to sign an agreement in order to receive severance.

Jay Friedman, CEO of Goodway Group, while acknowledging the moves last summer and January, strongly disputed any notion that those people let go were handled in any generic manner. He also disupted any notion that the cutbacks were the result of downsizing, but were instead the reassigning of resources to reflect what Goodway Group’s clients are requesting.

“Last year, about this time, we saw a couple trends emerging among the clients that we work with and the clients that we want to work with, and those were the need for more marketing transformation, consulting, more in-depth analytics and measurement expertise and the fusion of the funnel,” said Friedman. “And in order to deliver on the needs that I just laid out there were some areas of the business that were overstaffed because marketers weren’t demanding those anymore, and there were some that were understaffed.”

As far as the way layoffs were handled, Friedman said the company takes pains to be transparent and supportive. “Beyond an email, each person had a one-on-one conversation, both with a people leader at Goodway as well as our People Experience department,” said Friedman. “In that interaction, they were told about the transition, and it included a severance package, a full month of paid benefits, an expedited opportunity to apply for current openings, and fully paid outplacement services.”

Friedman said more than one of the affected employees took a new role in the company as a result of the effort to keep people whose positions were eliminated. He said the eliminations had something to do with clients in-housing various “hands-on-keyboards” functions, but also because Goodway was reinvesting in growth departments. “There’s been nothing else [in layoffs since January], and there’s nothing planned,” he added.

In recent months, other former Goodway Group employees across marketing, design, strategic insights and customer and team success roles have been posting about their job losses on LinkedIn, citing it as part of a “reduction in workforce,” as one former staffer wrote on LinkedIn four months ago.

A former employee who worked there for around two years told Digiday that the layoff in 2023 happened “in several rounds” within weeks of the company’s annual summer gathering. (The company is fully remote.)

This former staffer said it seemed sudden and unexpected when they were fired this January as one of six, especially given that their leadership previously discussed growing that department. “I wasn’t given much reasoning, just told it wasn’t performance related [and] the role was being dissolved,” the source said, adding that other departments were affected, as well.

“As they reprioritize their business objectives, I’ve seen them lose some of their best talent – which I find somewhat telling,” the source added.

Again, Friedman strongly refuted the notion of several rounds, acknowledging only two rounds last summer and in January. He also insisted the moves were about reassigning resources to growth areas and cutting back on departments that were less profitable or valueable to clients. For example, he said 18 months ago, Goodway Group had only a “handful of people” in analytics — today, he said that department has grown threefold.

The last major layoff before these was around 2017 when an estimated 80 people were fired, according to the first source. Another source that worked at Goodway for more than 10 years also added that the losses in 2017, which impacted around 10% of its employees at the time, came after the company lost a major client.

More broadly, current cutbacks are perhaps the result of agencies being exposed in weaker areas like managed services, or “working media,” explained analyst Brian Wieser. That’s been the case for many of Goodway’s peers in the last year, particularly if “they were heavily exposed to tech clients.”

These layoffs also have come as Goodway Group continued making strategic and organizational changes in recent years, as Friedman explained. Goodway Group, which now comprises five brands, originally started as a printing business in 1929. Since then, the Goodway division has been developing tech platforms and tools using automation and machine learning, while its other newer brands recently launched a retail media accelerator and made other strategic expansions to focus on brands across the marketing funnel.

One source close to the company said since summer 2023, the company has won new clients in B2B, CPG, electronics and retail — but declined to identify any due to client sensitivities.

Those two new divisions add to the agency’s umbrella of existing brands with marketing advisory firm Control vs. Exposed (CvE), performance marketing agency Tuff, and Goodway, its managed service media and analytics business. The company acquired Tuff and Canton Marketing Solutions, a data and media consultancy, in 2022. 

The third source described the agency’s aim at the time seemed to entail “going after clients directly” by growing these parts of the business. “But it hasn’t been profitable,” the source said. While spinning off CvE allowed Goodway to expand overseas, the company later pulled out of the Singapore location, they added.

Friedman explained that the Singapore office consisted of two people who, upon the outbreak of COVID, wanted to be “repatriated,” and as a result the office was closed.

Last January, Goodway also promoted Friedman from president to CEO, tasked with “[driving] the agency’s growth [and] continued investment in its people and technology,” per its release. The company said it was focused on expanding its full-service retail media practice, including building out a retail media network offering and driving brand performance.

For independent agencies, buying up these shops can help them compete with holding companies and other established groups in the growing tech and digital media space. While Canton has worked with brands from Nokia to Staples, it has also collaborated with Walgreens Boots Alliance’s retail media. These additions may ultimately help independent agencies in building out their consultative services – especially as cookie depreciation and larger AI disruptions come.

Startup and tech advisory firm Evergence anticipates more agencies are “at risk of being disrupted” if they don’t bring a product management approach to the business, explained chairman and CEO Sean Everett.

“Times are very challenging across agency land and professional services in general,” added Rio Longacre, managing director of advertising and marketing consultancy Slalom. Longacre agreed that AI will bring more uncertainty and job losses – particularly for media planners, buyers and designers. Additionally, the holdco “buying sprees” of digital marketing and tech shops is perhaps coming to a halt after several years, with much of the M&A activity slowing down now, he explained.

“Agencies are circling the wagons to focus on their core strengths,” Longacre said. “Hiring is slow and layoffs continue. M&A activity is limited as everyone is focusing on survival and big, strategic bets are being delayed or curtailed.”

https://digiday.com/?p=547838

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