CHE Proximity makes 35 redundancies due to COVID-19 impact on clients
Creative agency CHE Proximity has made 35 positions redundant, Mumbrella can reveal.
CEO Chris Howatson told Mumbrella that the redundancies resulted from COVID-19’s impact on the agency’s clients.
Temporary salary reductions were also put in place at the agency
“A number of our clients were central or adjacent to travel, leisure and lifestyle categories and were forced to hibernate their businesses with immediate effect upon the arrival of COVID-related measures. These clients have endured a terrible time and we’re delighted to see their businesses slowly remerge.
VIA A GROUP WEBEX!!!
And not everyone was included on the call lol
How else would they have announced the changes though? It’s not like they could have called everyone into the office.
The thing is, they should have called everyone individually. And treated them like humans, not numbers. A group firing only makes it easier and more efficient for the people doing the firing, not the people losing jobs. It lacks humanity and empathy.
Don’t be naive. Everyone is talking about this including clients and agencies. It’s the most talked about cruel redundancy. Clearly you’re a close relation to this.
You do it one to one out of respect of the staff. By not doing this it shows the culture – not a good one clearly.
As a Director of another agency, we too had to let 43 of our valued team go. We made the redundancy process as personable as possible by having one on one calls and supporting them after.
Poor taste.
I heard that some of the people let go weren’t even working on the clients that CHEP lost. Weird.
The funny thing is that they only lost one client – Velocity. And they weren’t paying the bills for the 35 let go.
CHEP have a huge roster of COVID resilient clients. This feels opportunistic rather than out of necessity.
Any reason why CHEP decided to let these people go instead of using the JobKeeper program?
They were eligible from my understanding.
Feel for the people let go, chin up guys!
They didn’t qualify. They only lost 15% of business.
redundancies happened before job keeper was announced I’m pretty sure. this all happened weeks ago.
Job keeper was announced the next day, but the lead up to it was obvious on the day the mass redundancies were made.
It’s a lot more than 35
Some agencies may use this time to lay off dead weight and have a reasonable excuse.
In my view, business doesn’t just evaporate overnight to the talk of 35 plus people, in particular when this happened well over a month ago. Something must be awry well before this goes down. Also surely the upfront cost of redundancy could’ve been spared with JobSeeker?
Have any other agencies made redundancies? Glad to hear it is only CHEP.
Absolutely. OMD immediately cut a number of relatively senior figures around the same time as CHEP did this.
Notably, industry press has been very, very quiet on the agency lay offs. I mean this happened 6 weeks ago and it’s only being reported by Mumbo now..
Even if 35 isn’t the true amount I’m sure the staff at CHEP who are all working weekends on reduced wages have been keeping close count.
Pay cuts for the remaining staff and an expectation to work longer hours and weekends. So nothing new there.
Probably better off going on Job Seeker…
The salary reductions were a blanket cut too, so seniors took the same percentage as juniors. Apparently they were told that ‘no one would be reduced to below minimum wage’. Pretty bloody selfish.
Capitalism in the good times, communism in the bad times.
Same at wpp. It’s not even communism to be honest because the seniors are on bonus, Long term stock incentives etc. So salary is not their full income whereas for most of us it is.
Some inspiration for next time Howie… https://medium.com/mind-cafe/the-ceo-of-airbnb-taught-us-an-extraordinary-lesson-when-he-fired-25-of-his-company-4d41b2e47656
35 people represent 8% of your workforce?
So CHEP employs over 400 people? A cursory glance at LinkedIn has 143 employees. Something doesn’t stack up
They have 700 across the Clemenger Group according to this mumbrella story.
https://mumbrella.com.au/chris-howatson-to-head-all-of-clemenger-groups-australian-agencies-575146
If these are directly CHE losses, the commenter that suggested there are more, could be referring to job losses elsewhere in the group.
This article is referring to CHEP only and there were more than 35.
The executives earn around $1m per annum. CHEP have some large clients with meaty retainers. Is there no cash put into a savings fund to fund weak periods?
Mumbrella, there have been plenty of layoffs and client losses at other agencies. Why just focus on one or two? What determines which ones make the headlines?
Hi ‘Others’,
Two things:
* We report on the stories that we know, and have substantiated
* We’re also working at reduced capacity (80% at the moment), which means we can’t get to everything as swiftly as we normally would.
The pace of change across the industry combined with our own reduced capacity does mean we can’t get to everything.
Even pre COVID-19/ economic collapse though, this is something all media outlets grapple with. For example, if you have the story that Company A is corrupt/ embezzling money, should you report it, even though there are probably others (Company X, Company Y and Company Z) doing the same thing, but you just aren’t aware of it yet? Is it unfair to focus on Company A over the others? Or would it be more unfair to wait, particularly as you will never have time to do every story / uncover every injustice etc etc?
If you solve that conundrum, you can have my job (although, if you do solve it, you can also probably aim higher and take a more prominent position elsewhere).
I hope that helps,
Vivienne – Mumbrella
Great response. Proper lesson in journalism.
Great response. Thanks Vivienne.
A crisis like this only goes to show how poorly run some agencies are. If you needed another reason why agencies will die at some point, look at the compensation structure. They are designed to line the pockets of the few at the top and not to run a long term business
Regardless of why the decision was made – and as someone who was there I don’t really buy the reasons stated in this article – nobody can deny the way it was done shows a complete lack of class
Why is this not the first horror story I’ve heard come from CHEP recently. I thought they would’ve started reflecting internally considering all the talk that’s been going on around their culture and how they treat their staff. Super disappointing for an agency that was doing so well. I hope Chris can see it for what it is and turn things around before it hurts them long term.
This was done 10 days in to working from home, are you telling us you lost this much revenue in 10 days? When a lot of the clients are on retainers any way, contracts and money does not disappear over night.
There were also plenty of other solutions to be tried before a knee-jerk reaction such as this.
If things were as bad as CHEP make it out to be then they would of qualified for Job-Keeper.
All this so the fat cats at the top can keep their shareholders happy and their profits high.
SHAMEFUL.
2021 Mumbrella Agency awards should have a COVID19 response criteria.
History should judges agencies for how they behave during this crisis.
Yes! @Vivienne can this be a thing for the next Mumbrella Awards? What a terrific category!
Hi Deano/ OIA,
I can’t ascertain from your comments if this is a serious suggestion, but I do actually really like the idea.
We’re not out of the woods yet by any means, so at the moment it’s hard to even imagine looking back on COVID-19 as something done/ historic – but I’d be keen to factor it in to future judging and assessment.
If I was in charge, points would be deducted for ‘We’re all in this together’, which I think would catch out most companies, but I’ll leave the exact criteria to my very talented (and perhaps less jaded) events content team.
Thanks,
Vivienne – Mumbrella
It’s always a shame to see people’s jobs on the line – and treated so poorly by their bosses, but something doesn’t add up here. Moving 35 people on in an agency the size of CHEP is huge – Unless of course CHEP’s ‘innovative’ business model and run of new business success in 2019 isn’t exactly as profitable as it appears. And didn’t they just pick up the Nutricia media business? That would bring in dollars – so would surely save some jobs.
Fun fact. When negative comments appear on Campaign Brief about CHEP they complain and have the comments deleted.
A recent article on Campaign Brief about “mirroring” drew a lot of criticism, so CHEP demanded CB delete the comments!
Not the first time it’s been done.
Campaign Brief is one big Comments section
Few things here that should be broken down, I’m writing anonymously due to the animosity, but I do not work there and trying to have a fair lens of this – as someone who has had to let a lot of people go – all at once.
Also every agency has cut staff due to Covid – Ogilvy, Saatchi, Leos, Clems, TBWA, BWM, M&C, Havas – all of them. So not sure why this article is getting so much heat.
CHE did this weeks ago: So not sure why this is new news or published this week.
Mass redundancy: Having run large agencies, there is no easy way to announce and execute a mass redundancy. And no one has ever had to do it via Video call. So sure they could have called everyone individually but doing that with 35 people, via video calls, 1:1 would take 4 people 10 hours ish to do, but that time the whole agency would be dreading the next call. Anyway, they did a group announcement and and then immediately called each person. Sure its a different way of doing it – but Covid has thrown everything in the air. However lots of agencies when they’ve lost large clients, have also taken this approach. So it’s not new, not untried and not humane. It’s just one way of doing things.
Badly run agency: They are the fastest growing and literally came out of nowhere 3 years ago. They have won more business than any other agency and compete with consultancies, tech firms etc. Surely that’s not badly run? 3 years ago there were 40 odd people, there are now over 400 with 2 offices, Sydney and Melbourne.
Mass revenue loss: Covid has done this for millions of people and thousands of businesses. All of them cut costs, forced holiday leave and cut people – regardless of whether they’re ad agencies, consultancies of coffee shops. Covid also impacted some industries in weeks – retail, FMCG, airlines. Also most companies (even billion dollar ones) run on slim cash reserves and margins. So mass cost cutting happened quickly due to an unprecedented, world first pandemic.
Chris H – don’t know him and never worked for him, but he has literally built the agency himself and it is now one of the largest and the one held in greatest regard for being a modern model. Not sure why there’s so much hate on this blog about him personally – I think that’s pretty unfair, unless all the commentary is coming from people who know him directly. Also from what I know he is genuinely active in all clients, he’s not in an ivory tower like many CEOs – that’s pretty impressive and a key reason why they’ve won Samsung, IAG, Telstra – some of the largest clients in this country. That commands respect.
Job Keeper – if their employment numbers are right they would have not have qualified – it’s on Gov.au site. Also it’s highly unlikely that that would ‘fake’ their numbers to avoid getting a government hand out – they are a multi-national company and would be scrutinised by the BBDO holding group. So I’m not sure questioning head count works.
I know for a fact that BMF hasn’t cut staff… be interested to hear from other agencies cited on this post
Yes you’re right. I stand corrected. They did make big cuts a month prior. Was getting my dates wrong.
Yet again, untrue.
Try harder legend
I know for a fact three of the agencies you have mentioned have NOT moved people on but looked at cost cutting at all levels to save staff. The first role of real leadership is to sacrifice all other costs including salary’s at all levels before firing staff. If you fire staff as your first action you are either selfish as you are protecting yourself and your cronies or you are using this as a cover to move people on when you didn’t have the guts to do it before. I know people who have started at and left CHEP because its a authoritarian sweat shop. Please get your facts right before you get on the stage. You are wrong as is the culture at CHEP, clearly.
You must be pleased you’re hanging onto your job @Reality Check. But perhaps you don’t know or understand the reality.
Reality: An agency that grows from 40 to 400 doesn’t mean it’s well run as you suggested. Great agencies are great in shit times too (financially and culturally).
Reality: 4 people doesn’t take 10 hours. Maybe you need a more realistic calculation?
Reality: Other agencies have made redundancies but no where near as bad as this and not as talked about as this.
I don’t work there as I said.
Yes you’re right my maths was out but forgive the error.
Sure 40 to 400 doesn’t mean a lot of things. But it does show its doing something right and everyone in the industry fears pitching against them.. that speaks volumes.
I stand corrected BWM didn’t make cuts but they made a bunch of cuts just before Covid.
And again why so much vehemence ? It’s just a discussion forum for rational discussion.
Tensions and emotions are high(er than usual) because people’s livelihood are jeopardised. Management across the board doesn’t have an enviable task, of course. But it’s clear ‘when the going gets tough’, the pillaged profits lining a select few’s pockets do not protect those who worked for said profits. You’d just think an agency who preaches ground breaking innovation would be (1) better prepared for challenges in a modern world, (2) show humane leadership in dire times, (3) find new ways to deal with adversity.
If you want to draw in aspiring talent, you do the right thing, as hard as it may be, and you give every individual the respect they deserve during an unforced dismissal (on the redundant parties side).
Time for a new platform where us humble servants can leave honest unedited feedback on agencies
Unfortunately I too will need to be anonymous to protect myself from the wrath of the loyal ‘Cheppers’ currently living in the fear or favour rule. Your fall from grace will too come unless you remain in line. It’s inevitable.
I was one of the mass redundancies, so this is speaking from experience. I was a praised member of the ‘team’ while at the agency and wouldn’t have any reason to be ‘dead weight’ as is being thrown around by your usual nay sayers.
The above bias response lacks the humanity that CHEP management thrives on. Suggesting the author is likely the very same select few who will be seething their dirty secrets are finally being addressed by the industry they claim to be above.
To also say Chris Howatson is a one man band, doing it all himself is a joke and writes off everyone else’s work. The success of an agency rests on the shoulders of all. Not a few. You’re only as good as the weakest link.
The culture is poisonous.
You’re flogged with a vision of purity, determination, comradery and ‘running toward the fire’ attitude.
The redundancy call was a well rehearsed, faux emotional dance.
People on the invite didn’t even know if they were there as support or if their necks were on the chopping block.
This display of leadership sums up the very character of those at the top. Sadly, a once promising model has proved its too good to be true.
Shareholders – rest assured, you’ll be collecting big this year. Management is solely on your side. Phew. Just know it rests on the back of a year long blanket 15% pay cut, 10 forced days annual leave (yes, if that meant 10days negative, so be it) and countless jobs.
In the words of Howie himself when questioned about management’s opportunity to take a bigger pay cut to balance books for those at the bottom end of the scale, “when you’re older, you have more things to pay for”. Interesting comment from the youngest CEO in Clems group history. Never mind middle aged mothers who have put jobs in the lines for families… age and salary don’t stack up in all cases. To further CHEPs view of women, you just have to look at the senior team. That’s a lovely split.
The list could go on.
Hi there,
I have taken some accusations / claims out of your comment. I think you have a valid perspective, which is why I want it to run, but as the publisher of the comment, we have to be careful about libellous/ defamatory statements that we can’t substantiate.
I wanted to be transparent and let you, and the readers of this thread, know that I deleted some paragraphs.
Thanks,
Vivienne – Mumbrella
Sadly it seems the inner workings of CHEP leave little to desire. Sad day for the industry with one of its leaders letting the side down.
The comment about keeping the top of the tree sitting pretty is right. They’ve made enough money over the past 4 years to hold out for longer than they did. It’s bad, but that’s capitalism for you.
They way it was done – yeah, looks bad too. Sure they didn’t mean for it to be that way, but it’s a really poor decision to vid call en mass.
Nice to see CHEP hasn’t been able to bend Mumbrella into submission and block comments in this forum.
CHEP – you may not like all comments, but unfortunately/fortunately actions and public work have a right to be criticised. Some may go too far, unfairly, when young talent is involved. But to those at the top, you’re paid the big bucks for a reason.
I hope this is an informative lesson and not brushed off as a ‘bunch of crazies’ so you can dismiss the core issue here. You work in an Australian service based industry – so rightly, you treat those providing the service with every democratic respect you yourself are entitled to.
The real test of leadership is during times of downturn, not the high wave we’ve been generally gifted with for the past decade. I’d have expected a powerhouse to be better and have capacity to weather the storm for longer.
I don’t know why there’s so much negativity here. CHEP is a nimble, agile, and innovative company. Really great to see them continuing this in the face of this unprecedented pandemic.
This is by far the most efficient sacking of 35 people I’ve ever come across.
Instead of hour-long phone calls with each of the sacked staff, they were able to rip that band-aid off in one short video conference with all of them. Probably saving countless hours in the process.
Well done to Howie, Ant and the rest of the management team for thinking of this. Even more impressive that they thought of it so early in the pandemic. This is truly the power of connected creativity.
Thanks CHEP, very keen to see what you do next!
Maybe comment when you’ve also been sacked in front of 35 other people.
That was pure sarcasm. So good !
Ha! Brilliantly done.
I just saw a whole bunch of jobs posted on LinkedIn by Che Proximity….sooo…what’s the deal with letting people go?!