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February 6, 2009 9:44 AM

Microsoft digital ad shop Razorfish lays off 70 in Seattle, Portland, SF and LA

Posted by Benjamin J. Romano

Razorfish, the digital advertising agency that Microsoft gained when it acquired aQuantive in 2007, is going through another round of layoffs. A spokeswoman confirmed that the company laid off about 70 people on Thursday on the West Coast, including its Seattle headquarters and offices in Portland, San Francisco and Los Angeles.

The cuts represent about 4 percent of the company's U.S. workforce.

"The workforce reduction is a difficult but necessary decision to effectively manage Razorfish's business through a challenging economic climate --- some key clients in the financial and tech sectors have cut their budgets," spokeswoman Sally O'Dowd said in an e-mailed statement.

In October, Razorfish shortened its name from Avenue A | Razorfish and cut 40 positions in New York -- about 2 percent of it's U.S. staff at the time -- in response to the financial crisis. (It also acquired a Madrid, Spain, advertising shop at that time.)

The latest Razorfish layoff comes two weeks after Microsoft announced its first companywide job cuts, but the 70 jobs cut at Razorfish are separate from the roughly 5,000 positions Microsoft intends to eliminate over the next 18 months. Laid off employees will be offered outplacement help, O'Dowd said.

Advertising agencies, like companies in almost every industry, are trimming staff. Even Crispin Porter & Bogusky, the hot-shot ad agency behind Microsoft's major Windows marketing campaign, is cutting jobs. Being named agency of the year for 2008 by Advertising Age and Creativity magazine didn't spare CP&B, which just laid off 60 people, about 6 percent of its staff. This Twitter feed is keeping track of ad industry job cuts.

Razorfish, headquartered in Seattle, is an independent subsidiary of Microsoft, though speculation about whether Microsoft would spin it off has swirled almost since the day the acquisition was announced. Razorfish employees did not get upgraded to the gold-plated Microsoft benefits, as Razorfish was held "accountable to deliver profit margins in line with others in our industry," according to a December 2007 e-mail from President Clark Kokich.

Razorfish had 2007 revenue of about $300 million and more than 2,000 employees worldwide, according to its latest company fact sheet.

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