Job cuts at Omnicom, ahead of its takeover of competitor IPG, have so far been mainly in its advertising group.
Accounts posted for the company’s September quarter show an increase in operating expenses, including $US38.6 million in repositioning costs, primarily related to “severance actions”.
In the nine months to September, $127.4 million was spent on severance.
Notes to the accounts say these “severance actions” were within Omnicom advertising group, pending the acquisition of IPG.
Omnicom posted September quarter organic growth of 2.6%. Revenue in the third quarter increased 4% to $US4.03 billion.
More cuts are ahead with the joining of the two companies, now expected to be final at the end of next month
And Omnicom is confident of exceeding its $US750 million cost synergy target.
Omnicom CEO John Wren, in a briefing with market analysts, said he wasn’t prepared to disclose a new number.
“But I will tell you that we have clearly identified synergies in excess of what I promised at the time we announced the deal,” he said. “More to come.”
The marriage of rivals brings together the third biggest advertising group, Omnicom, with the fourth, IPG, to form a company with 100,000 people and revenue of $25.6 billion (net revenue of $20 billion), with 57% of that in the US.
Wren said Omnicom has maintained an “extremely disciplined” approach to minimising disruption to day-to-day operations, ensuring client teams remain focused and continue to deliver.
“The commitment is reflected in the new business we’ve won, including American Express, Porsche, InterSnack, White Castle, OpenAI, just to name a few.
“Similarly, Interpublic saw significant wins with Amgen, Bayer, Anthropic, and Paramount.
“The level of support we’re seeing from both new and existing clients reflects the tremendous value they expect to gain from the proposed combination.
“We are building stronger momentum as we approach the closing of the acquisition of Interpublic. I remain extremely excited about the prospects for our growth, for our people and our clients.”
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