Last week’s redundancies at Landor’s London office will, regardless of their true relevance, confirm to many industry insiders what they have recently suspected. That the consultancy is getting on the right pitch lists but not winning many of them, and has a workforce suffering from poor morale.
Landor’s management is playing down the redundancy of two permanent and two freelance creatives, and the departure of a design director. “It’s nothing important. It’s an adjustment,” says London-based executive director Richard Ford. The redundancies were from Landor’s corporate identity department, although Landor staff tend to work across its three main departments.
Ford describes the departures as part of a process to balance work between corporate identity, packaging and environment design. European managing director Peter Farnell-Watson goes further, saying that recruitment of designers with different skills is under way for the same department. “As any organisation grows there is a need to adjust to market needs,” he says.
Farnell-Watson denies that the redundancies are symptomatic of the consultancy being in trouble. “The London company is doing alright. It is holding its own,” he says. The situation remains, though, that the UK arm is seen by rivals as a poor performer compared to those in New York and San Francisco.
Rival design groups may take more convincing than Farnell-Watson offers. In the last year, they would have encountered Landor as a contender for big name accounts such as TNT Express, Barclays Bank, Sainsbury’s, British Airways, GMG Brands and Concert (the BT/MCI link-up). Landor won none of them, although it did pick off the coveted prize of rebranding communications giant Cable & Wireless and has given Swiss bank UBS a new identity.
“This is a very pitch-driven business. You win some, you lose some,” says Farnell-Watson. The group does not reveal trading figures for its individual divisions.
Also, significantly, there is disagreement over the departure of design director Richard Stein. Sources close to the consultancy say he has also fallen victim to the “adjustments”. Stein, from the US, is an airline specialist and was a senior figure within Landor. Ford confirms his departure, but declines to comment on it. Farnell-Watson says Stein’s contract ended. “As far as the contract goes, we have fulfilled it,” he says. Stein was unavailable for comment.
Redundancies always depress staff morale, currently described by sources close to the consultancy as extremely low. Staffers at Landor are no doubt wondering if they could be next. Expectation of further redundancies is high.
But ex-staff raise a number of other concerns about the consultancy, which have also contributed to the low morale over the past months. Chief among these is the group’s structure. Previously, each office was a profit centre, but two and a half years ago a new system was introduced by joint European managing directors Peter Farnell-Watson and Carol Fabris (who has since left the consultancy).
The resulting matrix format centres the structure around design discipline with, for example, all European staff working on corporate identity projects reporting to London managing director Adrian Day. Ex-staff of varying seniority say they found this confusing, and that it causes insecurities and power struggles among management. Farnell-Watson describes such claims as “absolute drivel”.
The structural changes were necessary for a growing company and the management is professional, he says. “If people at a lower level didn’t understand I am surprised.” The consultancy now has 500 staff worldwide.
Another charge levelled by former staff is that Landor has an image problem. “People see it as American and expensive,” says one. And while rivals such as Wolff Olins and Sampson Tyrrell Enterprise have been busying themselves refocusing as brand consultants, Landor is perceived as more traditional and was perhaps being left behind. These factors had certainly depressed morale even before the redundancies. One former employee has described the consultancy as “a treadmill”.
Landor has also found all the women at senior management level leaving: Fabris left in September 1996, European marketing director for brands Lyndsey Cunningham left in June, and corporate identity consultant Helen Elliot-Cooper left in May.
Inevitably, little Ford or Farnell-Watson say will answer concerns the 100 London staff may have about the direction the group is taking. “We haven’t had to do this at all since the recession,” says Ford of the redundancies. This, he says, explains the level of concern among staff. “But we are making an adjustment, and not changing course,” he says.
Landor’s staff, and competitors, will be watching closely over future months to see what form Farnell-Watson’s further “adjustments” will take. And any changes may affect the offices in Paris and Hamburg, which was opened at the beginning of the year. Only time will tell if the staff’s fears or the management’s confidence is the most justified.