• by David Goetzl , August 8, 2007

As expected, Interpublic indicated Tuesday that significant layoffs will be coming at the New York branch of its Lowe network following the loss of the GMC account. The holding company did not provide specifics, but staffers dedicated fully to the account will be let go, as will others in the agency. The cuts are an attempt to offset revenue losses from the account that represented a considerable chunk of the shop's business.

It was unclear how many jobs would be lost, but it could be expected that the total would be in the 30 to 50 range and that employees could be reassigned. What was clear is that significant severance payments will result in the third quarter. IPG's DraftFCB recently laid off 50 workers following its loss of Verizon business.

Word of the layoffs as the GMC account shifts to Leo Burnett came on a conference call to announce IPG's second-quarter results. Organic growth in the U.S. was a healthy 10.7%, with IPG posting some $958.7 million in revenues.

Worldwide, organic growth climbed 6.6% to $1.65 billion. Net income rose 109% to $137 million.

Investors applauded IPG's performance, sending the stock up nearly 15% to more than $11 a share.

In a report, Bank of America analysts wrote that IPG posted its best organic revenue growth in at least three years (BoA had forecast 3.2% globally), suggesting that "the perception of IPG's key agencies is apparently much better on Madison Avenue than it is on Wall Street."

Separately, IPG said it spent $66 million on acquisitions in the second quarter--headlined by Reprise Media, a specialist in search optimization in the U.S., and securing the 51% it did not own of the Lowe Lintas agency in India. The Lintas purchase accounted for the vast majority, and could be in the $50 million range.

Also in India, IPG on July 31 announced it is acquired the remaining 49% it did not own in DraftFCB Ulka, which has 650 employees in six offices in the growing market.

As for IPG's (and the industry's) forecast for the remainder of the year, CEO Michael Roth said: "Clients are not pulling back" on spending. He cited the recent robust TV upfront as an example of the market's strength--but clients are trying to determine where to spend their dollars as the digital revolution accelerates.