Large Agency Layoffs: What It Means For You and the Advertising Industry?

Have you noticed something peculiar while recently scrolling through LinkedIn or news headlines? It is about the tech layoffs. The most recent shock came from Dentsu, one of the world’s largest marketing agencies. 

In recent years, industries have been facing seismic shifts. Dentsu has cut down 3,400 jobs worldwide. At the same time, Microsoft laid off more than 15,000 employees, which is huge by any measure. When we compare these numbers and what they mean for digital advertising agencies, the Dentsu story feels much closer to home.

These numbers are not just statistics but reflect a broader and gradual change. Companies are changing how they operate and deliver value. Every layoff headline holds up a mirror to the industry’s biggest challenges: Shrinking margins, changing client expectations, and emerging technologies.

The Story Behind the Layoffs

The layoff wave is still kicking strongly in 2025. As per TechCrunch, more than 150,000 jobs were cut across 549 companies in 2024. Till now, more than 22,000 employees have lost their jobs this year due to reductions across the tech industry. In fact, 16,084 cuts took place in February 2025 alone.

These layoffs are not just happening in the tech industry but also in digital marketing and advertising agencies.  As seen in previous recessions, the layoffs in 2025 are not simply a ‘routine’ cost-saving activity. They hold a much deeper connotation. They signal a fight for survival.

For instance, Dentsu has been around for 124 years, surviving world wars and global downturns. Yet, even after laying off so many employees, they are projecting just a 16-17% operating margin by 2027. That’s far below their previous 20-25% margins. 

In simpler words: agencies are working harder, with leaner teams, for less reward. Dentsu is not alone; here are some more facts and figures of prominent digital marketing and advertising agencies: 

• Ogilvy (WPP) has eliminated around 700 employees, 5% of its workforce, in June 2025. 
• MullenLowe Lintas Group India is adopting an ‘ecosystemized’ model and restructuring their workforce. The organisation is dismantling the full-agency service model. 
• Publicis Groupe laid off around 200 employees at its media and digital agencies, including Spark Foundry, Digitas, and the Publicis Sapient division.
• R/GA laid off around 15% of its staff in April 2023 and sold a private equity firm in March 2025.
• Havas Creative North America has reduced its staff by 16.7% in 2023, resulting in a 23% decrease in its workforce. Employee reviews on Glassdoor from 2024 and 2025 mention that layoffs are still ongoing in the agency.
• Wieden + Kennedy, which had been working in India since 2007, decided to shut down its operations in the Country in October 2024.
• GroupM, the media investment division of WPP, announced upcoming layoffs in May 2025 to improve global integration and optimize operations. 

When it comes to the Indian marketing sector, Indian agencies are silently letting go of 10% of their employees annually to save operating margins. Outsiders don’t even notice, but this isn't coincidental. It’s a pattern.

Why Margins Are Under Attack

So why is this happening? Why are agencies that sell creativity and brand storytelling letting go of their employees? Here are some of the main reasons behind why margins are under attack: 

• Clients want more for less: Big brands are questioning retainers and moving creative work in-house. The strategic shift has seen brands asking their in-house team to produce 20 social media campaigns instead of paying millions for a TV ad. 
• The performance pressure: Gone are the days when brand-building campaigns could work without showing any significant ROI. Now, every single penny spent on advertising has to show results in terms of positive clicks, conversions, and engagement.
• Technology has lowered barriers: AI tools are frequently being used in designing, editing, and campaign tracking. The global market for AI in the advertising industry is growing at a CAGR of 25.0% from 2025 to 2030. These rapid changes are making the production-heavy agency model lose its significance. 
• Economic uncertainty: CFOs are cutting discretionary spend due to inflation, slower global growth, and budget freezes. Under these circumstances, marketing is usually the first line item to get hit. 

It is surprising to know that the 2024 Cannes Lions State of Creativity report mentions that 45% of client and agency relationships are strained, mainly due to budget cuts and to protect operating margins. So, when we hear agencies fire thousands to keep 16% margins afloat, it's less about short-term savings. It's more of a strategic response to a broken model. 

What This Means for Modern Advertisers

If you are a modern marketer, you'll find yourself at the intersection of two stories. On one side, agencies are shrinking. But, on the other hand, you have more technology and tools in your hands than ever before. You can make the best use of it to advance yourself. 

Here’s what you can expect: 

Rise of in-house teams

Big brands won't need ad agencies to create huge production videos anymore. Instead, you will see an increase in the number of in-house teams that are turning out reels, posts, and campaigns. Moreover, with the help of AI tools, in-house teams can execute tasks faster and more efficiently. 

Agencies as strategic consultants, not production houses

The role of agencies is gradually shifting. They are shifting their focus from churning assets to providing strategic, creative, and integrated thinking that smaller teams or AI software alone can't easily replicate. 

Clients as co-pilots

Clients are no longer outsourcing everything. Instead, they are rolling up their sleeves and co-creating campaigns with their partners. Agencies that embrace collaboration instead of defending old models are doing better. 

How MarTech Integrations Can Help Protect Margins

The next big question is: what now? How do agencies protect margins when client behaviour has shifted? What should be the next step when human-heavy models are less sustainable?

The answer lies in MarTech integrations. These integrations serve as the new survival kit for agencies, helping them maintain better margins. 

As per the MarketsAndMarkets report, the global MarTech market is currently valued at USD 175.95 billion in 2025. It is projected to reach USD 296.88 billion by 2030, showing a CAGR of 11.0% during 2025-2030. 

The fear of losing your job to technology is understandable, but let’s not forget that the same technology can be used to advance career and business growth. Forward-thinking agencies are using AI-powered MarTech platforms to streamline workflows, automate repetitive work, and boost ROI. 

Here are some of the real ways where MarTech is stepping in: 

• Campaign Automation: MarTech platforms help in ad buying, placement, and creative optimization. They reduce manual hours and errors, making campaigns faster, leaner, and more efficient.   
• Creative Scaling Through AI: Large teams are no longer required to produce hundreds of ad variations. AI can instantly resize, reformat, and even personalize creatives to different audiences.
• Data + Analytics: Integrated dashboards bring data from various channels like Google, Meta, email, and other social media platforms. Agencies can now analyze data from omni-channels, reducing waste and focusing on what works best without waiting for month-end reports.
• CRM + MarTech Integration: Agencies can track a customer journey more accurately. Thanks to the integration of customer relationship management tools with MarTech systems, agencies can demonstrate tangible ROI to clients.

One example of a prominent MarTech tool is CMGalaxy, designed to manage digital marketing campaigns across multiple channels at scale. What makes it valuable in the current layoff environment is that it reduces the number of resources needed to deliver complex campaigns. Thus, helping agencies protect their operating margins. 

Recent Example of Impact of MarTech in Advertising

There are numerous success stories and case studies on how MarTech has benefited agencies and brands. But one recent prominent example is of Zouk. Just a few years back, nobody knew much about this brand. 

But nowadays, it's handbags and tote bags that are the talk of the town among ladies, particularly in metropolitan cities. If you travel through the metro, you'll easily find bags flaunted by many women.

This Indian vegan lifestyle brand is experiencing strong sales growth. According to the data, their revenue was: 

• $2.49 million in FY22 
• $5.40 million in FY23
• $8.91 million in FY24

That's nearly an impressive 300% increase in two years. The D2C brand has set an ambitious target of reaching ₹1,000 crore in revenue within 4-5 years.

The success of Zouk's sales heavily relies on its use of martech, primarily through its: 

• strong digital-first strategy
• in-house marketing efforts
• partnerships with technology platforms

MarTech platforms combined with the right approach have significantly helped Zouk establish itself as a strong brand, particularly in ladies' bags, and create better margins. 

The Human Side of All This

No doubt, these headline numbers and changes come with a human cost. Thousands of talented professionals in creative, strategy, and technology are losing jobs. Some might migrate to either freelance jobs or start-ups. Many might switch out of the advertising or digital marketing domain.

But there’s also a silver lining. The industry is essentially rebalancing itself. Layoffs are not the end but a signal. For years, agencies have worked on dysfunctional or cost-heavy structures. Today, as painful as it is, the reset might give way to smaller, smarter, and more integrated ways of working. 

Professionals with knowledge of MarTech platforms and other technologies may find themselves in new, emerging job roles that arise from these changes. 

Final Thought

The key takeaway is simple for advertising professionals: Layoffs at big agencies like Dentsu aren't just about job cuts. They are about survival in an industry where operating margins are thinner and budget cuts are common. The new technologies are changing the value chain of the entire process. 

The solution lies in better margins, which can be achieved through AI-powered MarTech platforms like CMGalaxy and strategic repositioning. For professionals in the digital advertising industry, success lies in optimizing operating margins and adapting to modern marketing.

The path ahead is a little turbulent, but with agility and openness to technology, agencies can grow in the face of relentless change.