Redundancies and agency closures following Omnicom's takeover of IPG reveal the negative human impact of M&A and clearly demonstrate a shift within the big global holding companies to financial from creative engineering, according to industry insiders.
Omnicom has retired creative agency DDB and has started cutting another 4,000 jobs globally, on top of thousands already gone as the new world’s biggest advertising group pursues synergies of more than $US750 million.
Among those going locally are two high profile executives at IPG Mediabrands, Mark Coad and Leigh Terry. Insiders said redundancies in Australia and New Zealand are "limited".
The changes locally include DDB Australia being folded into Clemenger BBDO Australia. Hearts & Science, Initiative, MediaHub, OMD, PHD and UM all stay as distinct agencies.
Think HQ founder and MD, Jen Sharpe, told AdNews that while the headlines focus on the size of the deal, the real story is the human impact.
“The speed of this consolidation is jarring and watching storied agency brands disappear for the sake of 'efficiency' feels like a blow to the diversity of Australia's agency landscape,” Sharpe said.
"Equally concerning is the message the new global leadership line-up sends. With apparently only one woman at the top table, it feels disconnected from the reality that diversity drives better business.
“Clients will be rightly asking how this impacts their work, but right now, the focus has to be on the people caught in the middle of such a massive shift.”
Julia Vargiu, director Australia at M&A advisory group, SI Global, said that retiring the agencies is not reinvention and growth, it is restructuring on survival.
“DDB, FCB, MullenLowe - these are not just names on a masthead. They are creative homes built over decades. Retiring them is not reinvention. It is restructuring," Vargiu said.
"A $9 billion deal with $750 million in projected cost synergies tells you everything you need to know.
"At SI Global, we see this as a clear inflection point. Holding groups are consolidating because their margins demand it. Meanwhile, global buyers are shifting toward digital-first, AI-literate and founder-led specialist firms - not because they are big, but because they are focused.
"The market is polarising. You are either consolidating or you are becoming more valuable.
"For Australian agency founders, this is not just global noise. It is a wake-up call. The opportunity is not just to survive, but to become the clear alternative.”
Virginia Hyland, CEO of consultancy SQUAD M&A, said that the hardest work won’t be systems or structures — it will be cultural integration.
"When two networks with long-established identities and different leadership rhythms come together, uncertainty ripples through teams," Hyland said.
"People question where they fit, whether their craft will be protected, and if their agency’s spirit will survive a mega-merger. In that ambiguity, momentum can slip and high performers start listening to recruiters.
"Unless culture is treated as a first-order priority, the risk isn’t just disruption — it’s losing the talent that clients value most.”
“Uniting more than 120,000 people across markets, disciplines and agency brands will require more than a new operating model. It demands a clear narrative, honest communication and leaders who can bridge the gap between global ambition and local reality.
"Australian teams, in particular, will need clarity on what changes, what doesn’t, and how their work benefits from the scale of the combined group.
"If the merger can preserve the best of both networks and give people a reason to believe in the new vision, it could create a powerhouse.
"But if cultural uncertainty lingers, it risks diluting creativity, destabilising teams and creating challenges that no amount of buying power can fix.”
Alex Radford, co-founder and partner at media agency D3, said the Omnicom-IPG consolidation confirms the global holding company model has shifted to financial engineering from creative engineering.
“Retiring iconic legacy cultures like DDB and FCB, alongside 4,000 job cuts, is a heavy blow to the industry’s talent pool,” said Radford.
“But for clients, it signals something more critical: a massive distraction that will inevitably dilute creative quality and speed.
“You cannot cut that deep or merge cultures that are that distinct without severing the relationships and local nuance that actually drive results.
“For New Zealand, this merger widens the gap between global processes and local reality. It creates a 'vanilla-isation' of the market - less choice, less competition, and generic templates replacing bespoke thinking.
“This validates exactly why D3 exists. While the mega-groups are forced to look inward to navigate complex integration and redundancy rounds, we are free to look outward.
“The independent sector now offers what the networks can’t: stability, agility, and senior talent focused on client growth rather than internal politics.”
Adrian Mills, ATime&Place co-founder and CEO, said it’s big news for the creative business and for clients who still believe in the power of creativity.
“Not long ago, the global networks were the pinnacle of creative ambition in Australia,” Mills said.
“But years of reshuffling across WPP, Omnicom, Publicis and IPG’s creative agencies have made something unmistakably clear: that ambition now thrives outside the holding-company model.
“The overall size of the job losses, relative to natural attrition, may not seem huge, but even a modest reduction in creative roles will be felt in our smaller, already fragile Melbourne market.
“Still, Melbourne has always punched above its weight creatively and today its strength sits with a thriving ecosystem of independent agencies that emerged from the hold-co brands.
“That’s where the mistakes of the past are being exorcised, the momentum is evident, and where the next chapter of Melbourne’s creative confidence will be written.”
Thompson Spencer group CEO Melanie Spencer also believes the importance lies in the thousands of people whose roles have been affected.
“The retirement of brands like DDB and FCB marks the end of an era. These agencies have shaped our creative landscape for decades and their legacy deserves recognition,” Spencer said.
“But the bigger picture is what we’re seeing globally: the democratisation of every industry. It’s happening in content creation, film, FMCG, fashion, banking, and tech. Speed, future-forward thinking, and new creative models are winning, not just scale.
“That’s why we built our agency, Thompson Spencer the way we did.
“Clients today want partners who can move fast, take risks, and innovate without the drag of legacy structures. The new world rewards agility and creative thinking over bureaucracy.
“While major global brands absolutely need the reach and infrastructure of a large holding company, this moment also opens a huge opportunity for independent agencies.
“Talent is freer than ever to choose where they want to work and clients are increasingly willing to be braver, to rethink how creativity and media can show up, and to back independent partners who can adapt at pace.
“The landscape has changed. The future won’t just belong to the biggest, it will belong to those who can reinvent the fastest.”
Havas Group CEO ANZ, James Wright, said that the industry is now firmly in a fast forward mode in an age of consolidation.
"Time will tell whether it will work out but you have to hope so, they have had a long time to organise themselves with their smartest people working on it and thinking about how to do it," Wright said.
"Nonetheless, with the sunsetting of some very famous brands it does feel like we have lost a lot of the personality and originality that our industry needs more than ever to stay relevant.
"Yes, things have changed and continue to at pace, whether it be how we create and deliver work, or what clients want to pay for.
"But I ask, do clients and the industry want a giant super group or do they want a partner that can move fast and makes them feel important?
"Clients want more choice, not less. More agility, less bureaucracy. Solutions, not just services."
Simon Teagle, CEO of Independent Media Agencies New Zealand, believes that the commentary from clients are the most important.
“I don’t believe any of OMG or IPG clients have asked for this change. The real risk is how many will look elsewhere,” Teagle said.
“They appointed the agency for a set of reasons, and if their criteria are no longer being met, they need to do what’s right for their business and rehome with an agency that does.
“Clients should be super critical of the change’s agency management wishes to bestow on them.
“If they don’t perceive they will achieve better outcomes, clear differentiation from competitor brands that have joined their agency or be paired with talent they can build strong relationships with, then that should be the catalyst for review.
“This merger brings uncertainty and stress for agency staff. But it brings massive opportunities for NZ advertisers to explore the many benefits that indie media agencies can offer their business.
“Now is the time to leave the global holdco’s to do what they are now set up to do - be outposts that look after their global clients.”
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