UM and Magna undergo multiple rounds of layoffs amid client losses

IPG’s Mediabrands unit underwent another round of layoffs within its UM and Magna units last week, Digiday has learned — but among them are evp and svp level staffers whose roles were not directly connected to revenue generation. It’s the latest in several small waves of layoffs conducted across Mediabrands’ various media agencies (mostly UM) in recent months, on top of several high-level executive departures that have also had an impact on operations there.

Several sources close to the company attributed the layoffs, and even some of the departures, to client losses, which have included UM’s SharkNinja and BMW — as well as the looming departure of Spotify’s global account, which put UM into review — and from which UM has already been dropped after the first round of review (even though technically it’s still a global UM account today). Those losses, despite other wins, are said to have put significant financial pressure on UM’s North American revenue situation, while globally the media agency is holding its own. Mediabrands, it seems, is in better shape as the other agency brands, with a number of client wins that offset losses. 

“It’s very unusual for an incumbent to be eliminated before a final decision is made,” said one source about UM already being out of the review process for Spotify. The client did not respond to a request for comment.

UM and Mediabrands executives declined to comment for this story, except for a statement from a Mediabrands representative. ““Building on three years of consecutive growth, IPG Mediabrands landed some of the largest pitches of the year including GEICO, Bristol Myers Squib, Constellation Brands and General Mills. Wins and losses are a natural part of the business cycle and our commitment to talent and community remains high always.” 

Among the executives laid off are Brian Hughes, evp of media intelligence and marketplace strategy at Magna, a 19-year veteran there, as well as Scott Suky, evp and global managing partner at UM, who is said to have overseen the Exxon and Accenture accounts, who was an almost 12-year UM veteran. Neither executive could be reached for comment. 

More than one source also mentioned that Mediabrands agency Initiative has not filled open positions over the last several weeks.

A non-exhaustive list of executives who have departed the company over the last six months includes Arun Kumar, IPG’s chief data and martech officer (whose role overlapped considerably with Mediabrands); Arielle Garcia, UM’s chief privacy officer; Joshua Lowcock, UM’s global chief media officer; Kristin Jones and Andrea Ebert, both evps and global managing partners at UM; and Sasha Savic, who was briefly global CEO of UM between February and June of this year.

But in recent weeks, UM has picked up global media duties for General Mills. Several sources also pointed to a unit within UM called Red, which has landed Lucid Motors as a client (which the client did not want publicized). The pickup of Boeing as a client, which sources confirmed, is another win the client didn’t want publicized. Mediabrands overall also won Geico back in February, as well as Kimberly-Clark, Constellation Brands, Bristol Myers Squibb and other smaller brands.

But for UM domestically, those wins are said by multiple sources to have been insufficient in making up for once-profitable clients like BMW, which was apparently quite a cash cow for UM — although sources close to the company said the client was actually handled by a unit called IPG Werks.

“It it hurts UM’s bottom line to lose that business, whatever you call the unit running it,” said one source. “BMW was a highly profitable client.” 

“BMW was one of the most profitable accounts for UM, because distribution of spend was digital-heavy,” said another source close to the company. “They were willing to spend and didn’t have procurement getting heavily involved.”

A third source said once BMW’s German parent company got involved in the last year, that’s when the account was lost in its five-year review process. BMW declined to comment for this story.  

Another source disputed that the financial hit from the BMW loss only affected UM — the source said it was a Mediabrands loss — and was made up for by at least $3 billion in new client billings from the above-mentioned client wins.

https://digiday.com/?p=527517

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