Fallout from the McDonald’s game scandal continues at Los Angeles-based Simon Worldwide, which last week unveiled plans to cut 215 more jobs and said “there is substantial doubt about the company’s ability to continue as a going concern.”
The announcements came as part of the company’s third-quarter financial statements, which showed net sales down 46 percent to $311.4 million in the first nine months of 2001. What makes the decline even worse is that 80 percent of those net sales came from Simon’s work with Oak Brook, IL-based McDonald’s — which dumped the agency in August after the FBI arrested the shop’s security officer, Jerome Jacobson, for allegedly rigging the chain’s instant-win games. Another eight percent of net sales came from erstwhile client Philip Morris, which terminated its contract soon after.
The latest job cuts, which follow the termination of 177 employees in the third quarter, will pare Simon’s worldwide operation to about 90 employees, the company said.
Meanwhile, Simon signed a retention agreement with ceo Allan Brown which ostensibly pays him $200,000 per month (through “forgiven debt” on a prior $2 million loan) for as long as he remains at the helm and a $750,000 lump sum upon termination of his contract, according to financial documents.
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