What the Publicis-Omnicom merger means for employees

While Publicis and Omincom call it a “merger of two equals”, there are those who wonder if there is enough room in one company for two giants.

“In short, we believe this is a merger that will set our new company on a path to accelerated growth, with long-term benefits for clients, employees and shareholders,” John Wren, CEO of Omnicom, said in a joint press statement.

But there is a concern about whether the two powerhouses can strike a balance, especially since Publicis is based in Paris and Omnicom in New York.

“In a people-business, mergers and acquisitions rarely create value in the way they do in industrial businesses,” Naomi Troni, CEO of Havas Worldwide Southeast Asia, said.

“You now have 130,000 employees potentially destabilised and wondering about the future.”

The new Publicis Omnicom Group now has a combined workforce includes employees working for agency brands like Saatchi & Saatchi, Leo Burnett, ZenithOptimedia and TBWA globally.

Like any new addition to a company of any size, there is also the concern of culture fit.

“These are big companies coming together, and it’s a big job to integrate them. If they believe there is a fit between the two cultures and they’ve got shared goals and visions, it should work out well,” James Hawkins, managing director at Dentsu Möbius, said.

“It’s one thing making these decisions in boardrooms in Paris or New York; the reality is there is a ‘where the rubber hits the road’ type of thing on how they can align.”

Simon Kemp, managing director of We Are Social Singapore, expects there to be some impact behind the scenes, but believes most roles will not be affected.

“I don’t think there will be any sudden changes, but there might be more integration in the back office to cope with the short-term challenges of the merger,” he added.

While Wren has announced there is no plans for job cuts, only time will tell - especially since the statement released indicated the company is expecting efficiencies of US$500 million (S$632m), which some industry watchers are interpreting as job cuts.

Business Insider’s deputy editor Jim Edwards predicts that because 60%-70% of a holding company’s cost is salaries, this could mean as many as 1,500 jobs lost, likely in administrative and back-room roles.