Publicis joins agency exit from Russia, passing control to local management

Dive Brief:

Publicis Groupe will cede ownership of its agencies in Russia to local management effective immediately as it suspends business and investments in the country over the war in Ukraine, according to a company statement.
The group is passing off control to Sergey Koptev, founding chairman of Publicis in Russia. The company said the transition carries a "clear contractual condition" to ensure employees in the region can have a future there. Publicis has about 1,200 employees in Russia.
In a statement, Publicis CEO and Chairman Arthur Sadoun said the group has been working on an exit from Russia since the invasion started, but needed to find a solution that safeguarded talent. The firm joins WPP, Interpublic Group of Companies and Accenture, among others, in making the painful choice to wind down Russian operations as the conflict escalates.

Dive Insight:

In relinquishing control of its agencies in Russia to local management, Publicis adds to the march of ad holding groups exiting the region as the war clashes with brand values and presents steep challenges to maintaining operations. Leadership noted that this scenario has been in the cards since Russia's initial invasion of Ukraine last month, but required careful consideration on the execution front. It condemned unilateral aggression in Ukraine and upheld that it will enforce economic sanctions in response to the crisis.

"We were committed to taking strong actions that fully respond to the gravity of the situation," Sadoun said in a statement. "But we were determined to take the necessary time to come with a solution that was truly people-first, because our 1,200 employees in Russia are our people too."

Sadoun also appeared in a video to employees explaining the reasoning behind the decision and affirming support for Ukraine. He said that ensuring the safety of Ukrainian employees, of which there are about 350, remains the "number one priority." Publicis is applying its Marcel technology platform to provide aid to affected staff.

IPG, which announced plans to wind down Russian operations earlier this week, used similar language to Publicis in describing how it did not want to "abandon" its Russian people. IPG has a smaller footprint in the country — about 200 employees — but many have worked with the company for decades. It is similarly shifting control to local leadership teams, in part to preserve continuity for non-Russian clients that will continue to work there. WPP was the first large ad holding group to discontinue business in Russia, while Omnicom is now the last member of the so-called Big Four that has yet to lay out a response plan in detail.

Consumers have signaled a clear interest in seeing corporations cut economic ties with Russia, but that's rarely a black-and-white decision, nor is it simple to sunset nationwide operations on a short timetable. Still, companies in professional services and on the consumer-facing end have encountered mounting questions and public pressure to take action. Those perceived as moving too slowly have faced social media boycotts and online outcry.