What happens when the great resignation collides with layoffs?

Six months ago, top of mind for any agency exec I spoke with was the talent crunch — specifically how companies could attract and retain a diverse, happy and upskilled workforce amid turbulence in the job market.

Today, people seem to still be figuring out their futures — moving jobs and taking on new positions as opportunities arise and workers seek deeper meaning from their day jobs. 

In the last week alone, Campaign US covered more than 10 significant people moves, including three exits from Havas and new leadership at McCann Worldgroup. (These announcements broke suspiciously two to three weeks after Cannes, which seems to have proven fertile ground for poaching.)

Despite a dip in May, the ad industry is continuing to add jobs, according to the U.S. Bureau of Labor Statistics. But as economic clouds gather, talent moves are colliding with layoffs — both at agencies and clients. 

R/GA laid off 5% of its staff in New York (20 out of 400 employees) in June “in order to adapt to the type of work we have in front of us — and the projects we anticipate in the latter half of the year,” according to an internal memo. In July, Huge, another IPG digital agency, cut 3% of its staff (37 people) in response to reductions and shifts in client spend. Dentsu also made 30 cuts in the Americas that month. 

Rampant inflation and mounting paranoia about a recession have led tech companies and other large client businesses to slow hiring and lay off staff this summer — a strategy they are likely to double down on after another quarter of disappointingearnings. 

Google, Apple, Meta, Microsoft, TikTok, Tesla, Netflix and Twitter have implemented either layoffs or hiring freezes. Pandemic darlings MasterClass, GameStop, GoPuff, Hopin, Shopify, Freshly and Vimeo are doing the same. Add Wells Fargo, Ford and 7-Eleven to the list, and that’s a cross-industry trend.

If these companies are laying off staff, their marketing budgets have likely already been cut,  or they are soon on the horizon. Reduced growth forecasts for ad spend reflect that reality. 

These market dynamics trickle down to agencies, which staff per head based on the needs of their clients. But in this instance, agencies are still filling vacant positions — often executive or high-level roles — while simultaneously cutting teams and staff in areas such as talent recruitment. 

This is sending a confusing message to the talent market, which is already moving to other industries such as tech or going in-house to brands. Now, they're suspicious of how the narrative of mass layoffs is conveniently putting the power balance back in the hands of their employers. 

The Great Resignation and the so-called recession have collided quickly enough to give the industry (and the entire market) whiplash. If agencies can’t strike the right balance on their talent needs during this continued tumultuous period, they risk overcorrecting as they did during the pandemic. 

And hiring staff back will be even tougher the next time around.