Award-winning ad agency Wieden+Kennedy announced last week that it had laid off 20% of its Portland, Oregon, staff, totaling about 90 people.
In a statement, W+K Portland president Jason White said, “Layoffs are terrible. There’s no way to sugarcoat it. But we’ve gotten to a place in Portland where we need to make changes to align better with how our clients work. Saying goodbye to any of our people is always a last resort, and we never make that decision lightly. Our focus right now is supporting everyone through this transition.”
The Portland office is W+K’s founding HQ, and even though the agency has expanded to become the largest independent global agency network, it’s still considered by many as the company’s home. This is where “Just Do It” was born. Yet these layoffs don’t represent a specific loss of business—they reflect a broader trend across the advertising industry in terms of how agencies are working with brand clients.
In his statement, White referred to it as “better aligning with client needs.” My understanding is that these layoffs have primarily impacted production positions at the agency that had originally been built up to support retail clients like Target, Verizon, and KFC, which required high-volume weekly promotional material. And while the agency had split with those brands as long as a decade ago, it maintained the services and full-time staff that had grown around that work.
This is in contrast to W+K New York, now the company’s largest office, largely built on the back of high-profile work for McDonald’s, AB InBev, and Ford, that did not include that same kind of retail production but more social media and prominent TV and film ads.
I learned in my conversations with various ad execs that these changing client needs reflect a larger shift in the industry. It used to be that agencies could expect and depend on a consistent list of work for their clients—a certain number of TV commercials, print ads, promotional assets, social media work—but that has gradually changed.
Now agencies are pitching clients on ideas—and their ability to creatively and strategically execute them—rather than how they might specifically come to life. This means that the bulk of heavy lifting, and consequently agency staffing, leans heavier toward the creative and strategy side of things, rather than production. Some of that work has moved in-house to the brands, and there are some agencies that lean heavier on that type of work. But for others, including W+K, the number of full-time staffers required for daily production efforts is much lower.
In January alone, AdAge reported layoffs at Havas, Interpublic’s R/GA and Huge; WPP’s Ogilvy and Grey; Stagwell’s Anomaly; and independent agency Mother. Employee expansion and contraction in the ad industry is nothing new, and is often associated with winning and losing clients. This is still the case, but W+K’s contraction signals a change in what clients are willing to pay for.
For W+K, it appears that it held on to a legacy model of production staffing for as long as it could. Talking to ad execs and reading between the lines of public comments, it’s clear the ad industry is shifting to reflect a change in client demand. Someone close to Ogilvy told AdAge last month that its layoffs were to ensure the agency can properly invest where it needs to, while WPP CEO Mark Read said the company plans to save $221 million via “efficiency opportunities.”
According to the ad execs I spoke to on background, whether from a shift away from production-heavy agency work or the impact of AI on that work, when it comes to staffing changes, the advertising industry should brace for more.
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