Media Reach cuts down on workforce
Media Reach, a top media shop in the country late December, 2015 cut down on its workforce, sacking no fewer than ten employees in various management cadres.
The drastic staff reduction exercise is coming on the heels of a possible redeployment of its founding chief executive officer (CEO) Mr. Tolu Ogunkoya to head the group’s operations.
Impeccable industry sources hinted MARKETIN EDGE that the sack of the employees which has sent shivers down the spines of those unaffected is believed to be creating fears for the agency that has lost some equally good hands to poaching by competitors.
It was reliably and authoritatively gathered that the current storm confronting the hitherto top-rated agency may not be unconnected with the loss of juicy media briefs hitherto in its account portfolio.
It will be recalled that Media Reach recently failed to retain the multi-billion naira Diageo Guinness media business after a hotly and fiercely competitive pitch. Although the leading media shop has warehoused the Guinness media business for almost a decade now. However, the arrival of a new management at Guinness who wants a new strategic thinking on its entire business, especially in a dwindling business environment was said to have informed the agency review exercise. After series of presentations and contest, Diageo Guinness dumped its incumbent media agency as it appointed Carat Media Fuse Aegis Dentsu to take over the business from Media Reach.
The Guinness account loss was also said to be the height of dwindling business of the agency having lost Etisalat media business early last year after an agency review pitch.
It is not yet certain if Tolu Ogunkoya will agree to step down as the CEO of the agency while he moves over to the group’s head office as helmsman. Also, there are speculations that the board may confirm one of the top managers of the agency as the new CEO, although the details are still being kept under close wraps.
These unfortunate developments have created a lot of tension in Media Reach as the agency mulls over what clearly has been a less than impressive business year. And there are indications that if the conditions fail to improve any time soon more members of staff may be shown the way out in a bid to salvage the agency.
Industry watchers are of the view that the declining fortunes is not peculiar to Media Reach as many other agencies are facing the same challenge and may be forced to make drastic changes soon. These bad times have been linked to the general economic down turn that has forced many brands to cut down on their marketing and advertising budgets as they engage in more of below-the-line marketing strategies.
This has also fueled the narratives about the need for agencies to consider mergers and acquisition in order to withstand the bad economic climate in the industry. Speaking recently on the subject Chairman of Casers Group Enyi Odigbo canvassed the idea of merger saying that “It is better for you to have 10 percent of something, than to have 100 per cent of nothing…Mergers have their roles to play so that these small companies don’t die along with their talents.”