Brand owners are facing tough times and job cuts are not only likely, it seems they are necessary. While, for many companies, much of 2008 has been about taking a considered, prudent approach, the collapse of Lehman Brothers, followed swiftly by the proposed merger between HBOS and Lloyds TSB, has thrown the situation into sharp relief.
HBOS has admitted that there will be cuts as the two companies are brought together over the next three years. A marketing industry source says that with nearly 900 staff in the Lloyds marketing department alone, there is little doubt that Nigel Gilbert, Lloyds chief marketing officer, will be looking to make drastic cutbacks.
He will not be alone; broadcaster ITV is already in consultation with its viewer marketing team and is planning to reduce staff numbers to create a flatter structure (MW last week), while rival Channel 4 announced plans to reduce staff across the board by 15% over the next three years.
Over in retail, another sector feeling the pressure of the economic crisis, Comet and Homebase have also announced they will be cutting head office jobs, while Bhs and Debenhams have introduced a freeze on salaries.
Though no one is openly admitting that marketing jobs are under threat, the mood in the industry is, at best, nervous. A recruitment freeze, including on graduate intakes, is inevitable. Hugh Burkitt, chief executive of The Marketing Society, says: “There are bound to be recruitment freezes and the big companies will suddenly stop their graduate programmes. It will be bad luck to be leaving university in the next two to three years. Companies go into such a panic and they feel their first loyalty is to their existing staff.”
The financial services sector is expected to be among the worst affected, along with travel and leisure, telecoms and automotive, especially at the luxury end of the market. Premium products that are seen as “nice to have” but not essential – branded smoothies and £3 capuccinos, for example – are also expected to suffer.
In the first instance, there is expected to be a halt on marketers moving jobs but with the average tenure of a marketing director standing at about 18 months, some do not see that as a bad thing.
An end to the ‘three Rs’
Rob Rees, a senior interim marketer who has worked for brands such Scottish Widows and Orange, says: “It will be good for marketers; it will force companies to organise themselves better. It will also stop the three Rs – rebrand, relaunch, re-sign – as it will stop marketers moving on before the results of their work have come through.”
There is also expected to be a reduction of middle management, who tend to be more expensive and are neither at strategy development level or actually implementing campaigns, so junior marketers, who are inevitably cheaper, could also benefit. On the other hand, training and career development programmes are likely to be axed as non-essential expenditure.
Money to be found
Professor Andrew Kakabadse from the Cranfield School of Management points out there is still money in the global market, and many companies are aware of that. He suggests that this could even lead to an investment in marketing, although more likely sales, as companies try to win over potential investors and new clients.
He adds that the Gulf region, Asia Pacific and China are not suffering like the UK and the US and says that while companies may be reluctant to in-vest in Western markets, emerging markets are booming. Experienced marketers could find new opportunities with international companies and in far flung markets.