US advertising agencies cut 1,100 jobs in September, the first monthly drop since January. The drop follows a gain of 1,800 jobs in August, when employment in advertising agencies reached its highest level since March 2020, the month the World Health Organization classified COVID-19 as a pandemic.
BLS reports advertising agency employment with a one-month lag, so October figures are not yet available. But October’s increase in the advertising, public relations and related services workforce implies an increase in advertising agency employment last month.
Agencies closely monitor staffing levels. Even before the COVID-induced recession began in February 2020, employment in advertising agencies had trended down from the record 208,800 jobs reached in 2018. The recession officially ended in April 2020.
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Job cuts in agencies before and during the coronavirus pandemic come as no surprise. Labor is the biggest cost for agencies, and advertising agencies struggled with sluggish growth even before the recession.
Employment in US advertising agencies tends to peak earlier than the overall US labor market in the last days of an expanding business cycle before a recession. On the flip side, agencies are generally cautious about adding more staff as the economy recovers, resulting in lagging staff growth.