Ad agencies are cutting staff as they ratchet down into a COVID-induced recession, and history suggests it will be a long slog to bring agency employment back to recent heights.
U.S. ad agency employment tends to peak earlier than the overall U.S. job market in the waning days of a business cycle’s economic expansion before a recession, according to Ad Age Datacenter’s analysis of jobs stats for the past 30 years. Agencies make deep job cuts during downturns. And agency jobs typically are late to recover as the economy rebounds.
The depth of damage to agency staffing in the current downturn is to be determined. But the outlook is dim.
Ad agency staffing in recent years plateaued even as ad spending—propelled by digital—reached new heights.
Agencies, which face growing challenges from major consultancies such as Accenture Interactive and competition from in-house agencies, enter this downturn in a weakened state.
The overall U.S. unemployment rate surged from 4.4 percent in March to 14.7 percent in April, the highest rate since 1939.
The nation last month lost a record 20.5 million jobs—more than one out of eight jobs—as the economy shut down amid the coronavirus pandemic, according to Bureau of Labor Statistics figures released May 8.
The nation last month lost a record 20.5 million jobs—more than one out of eight jobs—as the economy shut down amid the coronavirus pandemic, according to Bureau of Labor Statistics figures released May 8.
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