Omnicom wants workers back in their smaller offices

Omnicom to employees: “Say hello to my little office.”

Last week, Ad Age reported that Omnicom would downsize its office presence in cities like Chicago as a way to cut costs. On Tuesday’s Q1 earnings call, CEO John Wren confirmed the holding company’s decision to exit 1.6 million square feet of total office space. He also noted that the company has grown its headcount by ~4,000 since 2018 despite cutting its “office footprint” by 35%.

Mixed signals? On the call, Wren confirmed that employees are being asked to return to offices at least three days per week. While he remarked that “providing flexibility creates benefits for the health and well-being of our people,” he also said that “many of [Omnicom's] agencies are already at or ahead of” the three-day-a-week requirement, and for the others, “it’s time to come back.”

Phil Angelastro, Omnicom’s EVP and CFO, said on the call that the company will see a reduction in rent and occupancy costs, but noted that there will be “some incremental occupancy costs due to [having] more people back in the office.” One of those costs, it seems, is opening trial satellite offices in places like Connecticut and Long Island so workers can avoid the costs of commuting. 

As part of the plan, the company will also open new campuses in India, where Wren said hiring has “increased in order for us to become cost efficient for the benefit of our clients.”

Employee impact: When asked whether he was concerned about a three-day in-office requirement impacting Omnicom’s ability to recruit talent, Wren said, “Where we benefit is the Great Resignation is over…So we believe that we will be just fine.”

As for office consolidation, employees in Chicago told Ad Age there has been a lack of communication from leadership as well as concerns about having multiple Omnicom agency brands in a single space.

So is this part of a trend? Looks like it. Publicis CEO Arthur Sadoun said on its earnings call this morning that he is “seeing and expecting” creative and media teams to come in three days per week and that the company is “dealing with the situation, geography by geography, and expertise by expertise.” Publicis recently announced plans to downsize its office presence in Chicago, and has reduced its office space by 50% since 2018.