Saatchi to axe further 150 jobs

Click to follow
The Independent Online
Saatchi & Saatchi is to shed at least 150 more jobs, despite announcing stronger earnings for 1994 yesterday, as the shake-out continues following the departure of the Saatchi brothers, Maurice and Charles.

The loss of the Mars account by subsidiary Bates, on the heels of three other defections in recent weeks, has forced the company to make the additional staffing cuts.

But Charlie Scott, chief executive, said the Mars team itself would not be gutted. The company, which employs 11,000 worldwide, wants to win new business in the confectionery and pet food sectors, and will rely on the creative team formerly assigned to the Mars account to lure clients. "There are a lot of confectionery companies out there, and we are exploring the opportunities," Mr Scott said.

He conceded, however, that the redundancies would not have been necessary had the Mars business, worth £30m annually to Saatchi, stayed with the agency. Mr Scott did not rule out further staff cuts, if replacement business failed to materialise in a "relatively short period"

Saatchi's pre-tax earnings for 1994 rose to £32.4m, better than analysts' forecasts, and sharply higher than 1993's £19.2m.

Despite the improving profit picture, Mr Scott warned that 1995 would be a year of "transition" rather than of "continuing recovery" in light of the turmoil surrounding the departure of Maurice and Charles, a resumption of the legal battle between the brothers and their former company, concerns about a scheduled renewal of credit facilities, and the possible loss of other clients.

He said prospects would not be clear until mid-year, perhaps at the time of the June annual meeting, by which time the company was expected to name a prominent executive to fill the vacant chairmanship left by Maurice Saatchi.

A critical test for the company will come next month, when British Airways, long a Saatchi client, chooses an ad agency to handle its £80m annual advertising budget. Saatchi & Saatchi and the brothers' new rival agency are shortlisted.

Shareholders will be asked at an extraordinary meeting tomorrow to approve a name change for the worldwide holding company to Cordiant.