M&C Saatchi scraps dividend and cuts salaries due to coronavirus
M&C Saatchi today said it has scrapped its 2019 dividend and cut salaries for senior staff members as the advertising agency battles a downturn sparked by coronavirus.
The firm said a “very high proportion” of its top paid staff would take pay cuts, with board members and senior management committing to a 20 per cent reduction in salaries.
M&C Saatchi said it would secure government support to furlough staff in the UK, US and Australia, while it is in discussions with some employees about possible redundancies.
The troubled ad giant, which is still reeling from an accounting scandal last year, said that while trading was in line with expectations for the first two months of the year, its performance in March was “substantially weaker”.
M&C Saatchi has suffered a sharp decline in demand across the group, but insisted it would continue to pitch for new business.
The ad company, whose clients include Coca-Cola, Unilever and the Premier League, said it had taken steps to slash costs, including by cutting rent, IT and travel expenditure.
The firm said it would not provide guidance for 2020, but said its net cash position of £9m would allow it to operate for the foreseeable future.
The coronavirus outbreak is a further blow for M&C Saatchi, which in December issued a major profit warning and revealed an £11.6m hole in its finances.
The scandal led to the resignation of founder Lord Maurice Saatchi and three other high-profile board members, and the firm has since been forced to rebuild its leadership team.