IPG begins workforce restructuring in India
Last week, the Competition Commission of India (CCI) approved Omnicom's merger with IPG, making India one among the 10 markets where the deal has cleared antitrust scrutiny.
Ahead of its $13-billion global merger with Omnicom Group, Interpublic Group (IPG) has initiated workforce restructuring in India, impacting corporate functions like finance and HR. While aiming to protect creative teams, consolidation may lead to role redundancies and potential brand divestitures due to client conflicts. IPG Mediabrands India, however, is not currently downsizing.
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New Delhi: The Interpublic Group IPG ), which owns some of India's largest advertising and media buying agencies including McCann Worldgroup, FCB Group, MullenLowe Lintas and Initiative Media, has started the process of workforce restructuring in India. This comes ahead of its global $13-billion merger with Omnicom Group , said industry executives privy to the development.In December last year, the New York-headquartered Omnicom Group announced the acquisition of the Interpublic Group of Companies Inc (IPG) to create the world's second-largest advertising and media buying network, after WPP- GroupM. IPG is also headquartered in New York.Omnicom Group, being the acquirer, is leading the consolidation which may make some roles redundant, said one of the executives, who did not wish to be identified.Last week, the Competition Commission of India (CCI) approved Omnicom's merger with IPG, making India one among the 10 markets where the deal has cleared antitrust scrutiny."We are centralising corporate functions like finance and accelerating investment in central platform capabilities like production and analytics through greater consolidation," a global spokesperson for IPG Group said in an email reply. He added that "the actions are due to the transformation and restructuring that Interpublic announced in February, and not related to the proposed transaction with Omnicom."The merger process is expected to be completed by 2025-end."In India, the consolidation is starting with functions such as finance, human resources and regional roles. They are trying to insulate creative teams - core to agencies - and keep them intact as far as possible, but some of that may be inevitable in due course," said another executive. "The merged entities may have to let go of brands and associated teams which have direct conflict of interest in case of competing clients."While globally Omnicom is bigger, in India IPG is much bigger with blue-chip clients such as L'Oreal, Air India and Britannia. Omnicom's agencies here are much smaller, such as DDB Mudra, TBWA and BBDO.In addition to creative agencies, the IPG Group's media planning and buying agency network-IPG Mediabrands -Initiative Media, Lodestar UM and Interactive Avenues. It also owns PR firm Weber Shandwick. The group is not currently looking to downsize workforce in media buying, a critical function. Shashi Sinha, executive chairman at IPG Mediabrands, which works on media strategy, buying and planning, said, "There is no downsizing exercise at IPG Mediabrands India with reference to the proposed merger."Queries emailed to a spokesperson of the Omnicom Group remained unanswered till press time.
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