In this recent article in Campaign magazine, Lorna Tilbian contributes her thoughts on the impact of global environmental factors and AI on falling agency headcounts. The full article which was published on 10 June follows, with thanks to Campaign for their permission to republish here:
Clouds had been gathering over the advertising, media, and marketing industry for some time, threatening budget and staffing cuts. It was a storm fomented by the challenging economic climate in the UK and globally. Add in the escalation of AI capabilities, and, according to media analyst and investment advisor Lorna Tilbian, it is not surprising agency networks have been chipping away at their workforce. In 2024, the collective global headcount across the “big six” holding companies declined for the first time – by 1.6% – since the post pandemic rebuild.
The current M&A, restructuring and consolidation across the big agency groups – punctuated by Omnicom’s proposed $13.3bn (£9.8bn) takeover of Interpublic – conforms to a cyclical pattern Tilbian has witnessed since she joined the industry in 1984. “Margins expand in the upturn, and they contract in the downturn… You get years of growth, years of down, years of growth and so on,” she says.
However, she also points out that the factors at play in the lead-up to 2025 are unique. “Recently, it has been one thing after another, with Brexit, Covid, the Ukraine invasion and the cost-of-living crisis.”
She adds: “The Labour government in the UK is currently focused on taxing, spending and borrowing, which is not good for growth, or for job creation. And in the US, Donald Trump’s trade tariffs are obviously going to have a very big negative [impact] on globalisation – kind of a reversal, even.
“So those are the kinds of shadows under which, even without AI looming, jobs would be cut and budgets would be cut. With AI on top, it’s causing big, structural changes.”
Globally, the picture is largely one of consolidation. Yet in the UK, at an agency level, some network shops buck the trend while others fall in line – and independents are set to reap the benefits by absorbing staff.
Financial statements and information provided by the six biggest holding companies to Campaign show global staffing levels declined at five of the groups between 2023 and 2024. Publicis Groupe bucked the trend, growing by 4.7%.
Leaders at Grace Blue, a global executive search company serving brands and agencies, as well as sports, media, and entertainment organisations, attribute the recent significant level of ad industry consolidation to changing client servicing models in response to economic forces affecting their large-enterprise clients.
Natalie Napier, Grace Blue’s EMEA managing director, says: “If you look at Publicis’ ‘Power of One’ proposition, which centralises all of the group’s services, and [where it] makes much more sense to bring everything together, you can see how the holding companies are changing how they operate to be more efficient.”
The recruitment company’s global managing director, Sarah Skinner, adds that this is “personal to the era that we’re in”, with agencies “reshaping some of their product offering and capabilities” in response to “uncertain times”.
Looking at the key UK agencies at each of the holding companies that Campaign reports on annually in its School Reports assessments, the average change in staffing between 2023 and 2024 was a 1.4% increase at network level. But this included two holding companies experiencing a fall; Interpublic and WPP.
Interpublic had the biggest decline in headcount in 2024, of 5.3%. (With the inclusion of R/GA London, later sold to Truelink Capital, this would have been higher, at 5.6%.)
IPG’s figures for its total UK workforce suggest headcount declined by 5.8%, the equivalent of about 300 roles, to 4900 in 2024, ahead of its acquisition by Omnicom.
The drop among the six IPG School Reports agencies, which is slightly below the global 7% decline, reflected staffing levels at MullenLowe and McCann decreasing by 32% and 16%, respectively. The former pointed to a consolidation of several MullenLowe units within the wider agency, while McCann said the restructuring was forced due to the loss of client business. However, the declines were partially offset by Mediahub’s 50% increase in staff.
At a global level, Omnicom cut close to 3000 roles in 2024 ahead of its merger with IPG, although its year-end figures ended up being boosted by the acquisition of Flywheel, resulting in a 1.3% drop overall.
In contrast, among the eight UK Omnicom agencies Campaign tracks in School Reports, there was a 4.8% rise in staffing levels in 2024; all apart from three boosted their workforce, with Rapp’s 13% decline accounting for most of the losses, followed by Lucky Generals (10%) and Adam & Eve/DDB (1%).
Tilbian argues that the recent roll call of disruptive global events will give groups like Omnicom and IPG, which have said they expect annual “cost synergies” of $750m (£555m) once merged, further impetus to cut back on staff.
“They’ll have that cover, and Wall Street will expect it, because shareholders will be swapping Interpublic stock for Omnicom stock, expecting that bigger will be better, and the new agency will have to prove it. The objective will be to please Wall Street,” she says.
Omnicom and IPG didn’t respond to Campaign’s request for comment to shed light specifically on the UK situation for this report. But Omnicom chairman and chief executive John Wren has previously remarked that, within the $750m cost synergies, the business expects the merged company to save $130m through plans to “eliminate redundant roles, functions and back-office operations”. Although he also said this would not be in client services and revenue-generating roles.
Separately, IPG is restructuring in 2025 to continue its acquisition preparation, anticipating savings of about $250m this year, which will affect agencies as it reviews “certain areas of client service delivery”.
Restructuring has also been the name of the game at WPP; the network has rebranded its Group M media arm to WPP Media as part of its major centralisation push, whereby its agencies will move to a single P&L line.
It’s not the only major shift in recent years. EssenceMediacom X was folded into EssenceMediacom in 2024, 18 months after Essence combined with MediaCom globally. Creative agencies VMLY&R and Wunderman Thompson (both products of consolidation) also merged to become VML at the start of last year. In March 2024, meanwhile, The & Partnership merged with MSix & Partners to form T&Pm, which this month was renamed T&P.
According to Campaign’s School Reports figures, WPP’s like-for-like UK headcount across seven shops declined by 2.9% in 2024, which is an improvement on the 5.4% global decline. However, this does not include New Commercial Arts, acquired by WPP in the second half of 2024, or EssenceMediacom X, the latter of which could amplify losses.
VML’s drop was the greatest, both proportionally and in absolute terms; a decline of 13%, or 150 people, mostly freelancers. According to an agency spokesperson, this was due to becoming a single entity and “some alignment across support and central staff and in some cases shared clients”. There was no further comment from WPP.
Havas was a mixed bag in the UK; there was an overall increase in staff across the four agencies tracked in the School Reports, of 5.2%, which is out of step with the global 1.9% drop. But that didn’t mean immunity to restructuring. Customer experience agency Havas CX Helia shed 19% of its UK team between 2023 and 2024, leaving it with 108 people. This was described as a “not inconsiderable restructuring” by a spokesperson, as a result of “integrating two sites under one leadership team but also looking at teams, team structure and how we best service our clients”.
Havas London also contracted by a fifth, due to the loss of one of its top spending clients, drinks brand Molson Coors, to Ogilvy. “We revised the structure of the agency and reshaped our teams accordingly,” a spokesperson confirms.
On the bright side, the group’s media division, Havas Media Network, grew its team by 16%, to 948 people, following its acquisitions of social agency Wilderness, B2B agency Ledger Bennett and media agency DMPG, plus client wins, including Ocado and Red Bull.
While it isn’t possible to track the change in staffing among Dentsu’s UK agencies accurately in the School Reports, the holding company proposed to cut 2% of jobs in the UK and Ireland early last year. Globally, there was a marginal staffing reduction of 0.2%, based on provisional figures. In its financial results, the company said it intends to “invest in optimising headcount”.
The outlier across the holding companies is Publicis Groupe, with a 4.7% rise in staff in 2024. In the UK, that was reflected in a total rise across eight shops in the School Reports, of 3.6%. The company’s chief talent officer for the UK, Paula Cunnington, suggests that the trajectory is ongoing. “We’re investing €300m over from 2024 to 2026, 50% of which will be in talent and training, and the other 50% will be in tech,” she says.
On the other side of adland, a large majority of indie shops have been expanding or maintaining their headcounts.
There were some anomalies. Campaign’s School Reports data shows that in 2024, six shops (26%) out of 23 were in decline.
This compares with 14 (40%) out of the 35 agencies owned by Publicis, WPP, Omnicom, Havas or IPG, and 13 (52%) out of 25 shops with network or other ownership experiencing a drop in headcount.
Among the indies, Wieden & Kennedy’s 18% reduction to 187 staff was the most significant, by far. Others, such as St Luke’s, which dropped by 6% from 51 to 48 people due to Ocado’s departure, cite caution. “There was so much uncertainty throughout 2024, and when there is uncertainty, you don’t rush into hiring people,” chief executive Neil Henderson says.
Two agencies with the biggest proportional upward jumps were media shop Bicycle London (55%, from 29 to 45) and creative agency Atomic London (26%, from 43 to 54).
At Atomic London, chief executive Jon Goulding says the expansion reflects the agency diversifying its creative offering two years ago by moving into celebrity and creator brand partnerships, talent management and social-first brand building: “As an independent agency, we chose to invest in start-ups and acquisitions to accelerate this growth.”
Bicycle London’s trajectory follows its launch of three specialised units across performance marketing, creative strategy and influencer marketing, Mark Pavlika, chief people and purpose officer at the independent media shop, says.
He adds: “Our independent model, free of trading deals, allows us to be more cost-effective, while maintaining quality, making us particularly attractive as clients scrutinise marketing investments more carefully.”
Pavlika says that “the indie agency sector is thriving by emphasising nimbleness and specialised expertise, while larger networks contract”.
As that contraction among the biggest global networks continues, Tilbian predicts it will take about three years before the dust settles.
There will be several benefits for the indie sector, she says. The exodus of network staff will boost existing agencies and also lead to “breakaway talent” inspired to start their own shops.
Indies, Tilbian argues, will also be in a position to take advantage of the large networks’ emphasis on technology and AI, by making a virtue of human-led creativity, which she suggests will suffer as AI becomes more prominently used across the large networks.
Agencies also need to consider the commercial implications of charging when incorporating more AI into their services. She says: “My concern is with AI’s impact on agency margins – because if a service is so cheap and available off the shelf, why is the client going to want to pay a big premium?”
The agency networks’ consolidation efforts are not over yet. With the addition of AI changing the nature of service delivery and reinforcing the need for company reshaping, adland’s future workforce could look very different by the time the decade is up.
However, with indie agencies poised to absorb the talent overspill, perhaps staff movement, rather than a wholesale industry-wide contraction, will be the outcome.
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