IPG unveils plan to slim Lowe’s global operations

Interpublic Group (IPG) is to slim down its beleaguered Lowe Worldwide group from a global network operating in more than 80 outposts to an operation built primarily around just eight “main hubs”.

The move, revealed at a New York briefing for Wall Street analysts on Monday, is part of a broader effort by IPG to bounce back from a series of setbacks, and is meant to provide a more nimble operation for clients as well as greater profitability.

It involves the network slashing nearly half its majority-owned offices from 37 to 19, as well as cutting the number of minority-owned and shared agencies. The remaining offices will be centred in eight hubs of investment – New York, London, France, Sweden, Brazil, China, Thailand and India.

Lowe Worldwide chief executive Steve Gatfield says: “The move is not a scaling back of our operations but a refocus on the way we do business. It has been led by the needs of our clients, which are increasingly focusing on brand stewardship. The coverage of our network will not change fundamentally.”

Gatfield adds the move does not give any reasons for redundancies within the network. “Failure for Lowe is not a strategic option for IPG,” he adds, while emphasising the network’s plans to reverse client losses and management turnover.

IPG lost $272m (&£155m) from continuing operations last year, and restated results dating back more than a decade because of accounting difficulties. Lowe itself has lost many key clients recently, including Tesco to former founder Sir Frank Lowe’s start-up The Red Brick Road.

IPG will continue to operate its McCann Worldgroup and FCB arms as global agency networks, and says both will be aiming to expand outside the US.

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