Diving brief:
- Publicis Groupe will hand over ownership of its agencies in Russia to local management with immediate effect as it suspends its activities and investments in the country due to the war in Ukraine, according to a statement from the company.
- The group passes control to Sergey Koptev, founding president of Publicis in Russia. The company said the transition has a “clear contractual condition” to ensure that employees in the region can have a future there. Publicis has approximately 1,200 employees in Russia.
- In a statement, Publicis CEO and Chairman Arthur Sadoun said the group had been working on an exit from Russia since the invasion began, but needed to find a solution that preserved talent. The company joins WPP, Interpublic Group of Companies and Accenture, among others, in making the painful choice to end Russian operations as the conflict escalates.
Overview of the dive:
By handing over control of its agencies in Russia to local management, Publicis adds to the march of advertising groups leaving the region as the war clashes with brand values and presents great challenges for maintaining operations. Leaders noted that this scenario has been in the cards since Russia’s initial invasion of Ukraine last month, but needs careful consideration on the execution front. He condemned unilateral aggression in Ukraine and said he would apply economic sanctions in response to the crisis.
“We are committed to taking strong measures that fully respond to the gravity of the situation,” Sadoun said in a statement. “But we were determined to take the time to deliver a truly people-centric solution, because our 1,200 employees in Russia are also our people.”
Sadoun also appeared in a video to employees explaining the reasoning behind the decision and affirming support for Ukraine. He said ensuring the safety of Ukrainian employees, who number around 350, remains the “number one priority”. Publicis applies its Marcel technology platform to help disaster-stricken personnel.
IPG, which announced plans to end operations in Russia earlier this week, used language similar to Publicis to describe how it didn’t want to “give up” on its Russian people. IPG has a smaller footprint in the country – around 200 employees – but many have worked with the company for decades. Likewise, it is transferring control to local management teams, in part to preserve continuity for non-Russian clients who will continue to work there. WPP was the first major ad holding group to cease operations in Russia, while Omnicom is now the latest member of the so-called Big Four that has yet to come up with a detailed response plan.
Consumers have clearly expressed an interest in seeing companies sever economic ties with Russia, but this is rarely a black-and-white decision, nor is it straightforward to end domestic operations. in a short time. Still, professional services firms and on the consumer side have faced growing questions and public pressure to act. Those seen as moving too slowly have faced boycotts on social media and outcry online.