Adler-Chomski ad agency lays off 20

Uri Einy
Uri Einy

CEO Uri Einy insists many of the employees laid off will join digital arm MediaCom Interaction.

The cutting of advertising budgets by anchor customers in the Adler-Chomski group is beginning to exact a price: sources inform "Globes" that the agency laid off 20 employees in recent weeks.

Ader-Chomski hopes to avoid media publicity that is liable to have a negative impact on the agency's momentum. Its actions are therefore being carried out gradually under the radar, with the agency attempting to link them partly to an ongoing organizational change.

Adler-Chomski had a difficult year in 2014, when the volume of its advertising fell 10%. The decline resulted mainly from a significant cut in some of the agency's key budgets, the most important of which was Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ). Pelephone Communications Ltd. stopped advertising altogether, and advertising activity by Bezeq itself has clearly slowed in recent months.

Another significant client that is spending less money through the agency is Shufersal Ltd. (TASE:SAE), which did most of its advertising in recent months through Gitam BBDO. Regular work on these budgets requires a great deal of manpower.

Negotiations to sell shares to WPP

It appears that Adler-Chomski is trying to keep a low profile with its cuts. Although the agency is not alone in having to cope with a weak market, in contrast to the rest of the market, Adler-Chomski is in the middle of negotiations for the sale of shares to the WPP group, and therefore has an interest now in giving the impression of strength and power.

The agency is therefore officially claiming that some of the cuts are due to the organizational change taking place in the digital sphere, including the founding of a separate company, MediaCom Interaction, for digital advertising. The new company is designed to take on the measurable aspect of digital advertising, social network banners, etc., while the image part of digital advertising will be subordinated to the creativity department.

Adler-Chomski joint CEO Uri Einy confirmed the report, saying in response, "We're in the midst of a change in our organizational structure. We recently cut back on positions in the advertising agency in favor of jobs in MediaCom Interaction - the digital arm we're setting up. A large proportion of the employees who left us will be switching to that company."

Published by Globes [online], Israel business news - www.globes-online.com - on March 12, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

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