RealTime IT News

Razorfish Offers "Voluntary Termination" to Branch Offices

New York-based interactive shop Razorfish Tuesday confirmed rumors that it had offered employees in several of its offices "voluntary termination" packages.

A spokesperson from Razorfish said that on Friday, the company gave employees in its Boston, San Francisco and London offices a choice of whether to resign and accept an "enhanced severance package" or to stay on.

"The context behind it was that we wanted to avoid another round of layoffs," said spokesman David LaBar. "But everybody's feeling the pain today, from small companies to large companies. The market is continuing to pull back, and it's harder now than it was even a couple weeks ago."

Razorfish's Boston office employs 224, while San Francisco houses 127 and London has 224 employees. Worldwide, the company employees 1,500.

Employees have until the end of the week to accept the package, which is commensurate with their pay level, seniority and time of employment, LaBar said. The offer is "something enhanced from what you'd ordinarily get from a layoff situation," he added.

LaBar said the firm felt that requests for employees to resign were the "most human approach to a difficult situation," he said. "It gives employees a choice, remembering the tough marketplace they're in."

LaBar declined to disclose the amount that Razorfish is hoping to save from the reductions, and said the firm couldn't anticipate how many of the employees would accept the offer. He added that Razorfish is not planning on closing any of the affected offices.

The news continues a spate of announcements from other firms in the digital marketing, consulting and design services industry, who are trying to retool their operations as client demand withers.

As revenue dries up from both floundering dot-coms and traditional clients -- who are rethinking their marketing budgets in a tightening economic climate -- players like Razorfish and Chicago-based marchFIRST are hurrying to reorganize. MarchFIRST announced the resignation of several of its top executives and the start of a search for a new chief executive on Monday, a move that company said was meant to help the firm reach profitability in a difficult market.

Similarly, Razorfish said its new move was in response to slacking client demand.

"We had to analyze current client demand with supply of labor, looking at utilization rates on our current and projected pipelines of business," LaBar said.

While LaBar said there currently are no additional plans for offering the voluntary termination package in any of Razorfish's 12 other offices, "we always continue to look at client demand versus labor supply, and we're always considering options to lower cost in relation to revenue structure."

One of those options that Razorfish shortly will put into effect includes a management consolidation, or "regionalization," in Europe. The company's London and Amsterdam offices, for instance, will share one managing director, as well as accounting, human resources, and other non-billable portions of their businesses.