Wax staff ‘blindsided’ by agency closure

After a lack of communication and an office lockout, more than a dozen staff are out of work in a challenging job environment.

After 14 years in business, Calgary agency Wax has shut down operations.

A statement posted to the agency website cites “unforeseen circumstances” and a deepening economic recession for the closure. Initially, when strategy reached out to Wax for more information about the closure last week, the agency referred back to the post on its official website.

“We are grateful for the opportunity we had to work with so many creative people, smart clients and talented partners…Thank you to everyone who contributed to our journey,” the website post reads, in part.

However, speaking to multiple sources familiar with the situation reveals staff and clients were “blindsided” by the news.

The sources, who did not wish to be named, tell strategy that on March 13, Wax shut down its operations unexpectedly and without prior notice to employees. Three days earlier, on March 10, Wax employees had been locked out of the building, which management blamed on miscommunication with the building landlord ahead of an office move planned for the following Monday. At the time, they were able to retrieve most of their belongings under supervision of the landlord.

Staff continued to work remotely, with management assuring them on March 11 that they would be paid as usual on the upcoming Friday. Instead, when March 13 came around, they were informed that Wax would no longer be operating.

Sources say that Wax staff have yet to receive their expected pay, and have not received severance, unpaid expenses or vacation pay. Vendors and clients have also been “left in a lurch,” though some Wax staff have been working with clients to recover files and materials on their own time.

When reached for comment about the events of the last two weeks, Dan Wright, president of Wax, emailed a statement to strategy. The statement said staff were notified that they’d be laid off on Mar. 13, adding that employees have been allowed to enter the premises and retrieve their personal belongings on “several occasions.”

Wright adds that management is currently in negotiations with various parties to arrive at “a mutually beneficial outcome for everyone involved.” The initial lockout happened just as work-from-home and social distancing practices began going into effect across Canada in response to COVID-19, and Wright says the impact of the pandemic impacted management’s ability to address outstanding issues in a prompt manner. Though not fully removed from agency operations, Wright has also been on leave for roughly six months, which he says impacted his ability to manage things on a day-to-day basis. Attempts by strategy to contact Wax partner Monique Gamache went unanswered.

As for what led to the closure, Wright cites the state of Alberta’s economy. The province faced a mild recession last year, according to analysis from the Conference Board of Canada, having just recovered from a more severe recession in 2015 and 2016. Wright says worsening sales led to a loss of retail clients, and had been “exploring a new and alternative business model” to keep the agency afloat, including discussions with Wax’s landlord and other parties to manage the transition, but a collapse in oil prices earlier this month “directly and indirectly impacted” Wax’s ability to continue operating in the “current economic and social climate.”

Wright did not address any of the other claims directly, but says he’s “personally saddened” that the agency had “no choice” but to close up shop and lay off its employees. “I remain committed to working with all parties to help alleviate the impact of Wax’s closure on everyone involved,” he says.

The agency employed roughly 15 people outside of its partners and had a roster of clients in recent years that included the likes of Honda, Servus Credit Union, Moxie’s and Allseating. Sources said that from a creative perspective, Wax appeared to be as successful as ever, and the agency has long been known for awards excellence both within Canada and at international shows: in 2014, it received a Black Pencil at the D&AD Awards, one of only seven given out globally that year, for work on the Calgary Society for Persons with Disabilities’ annual report.

Though not directly caused by COVID-19, Wax’s closure comes at a time when many agencies are facing significant reductions in work from clients. According to a survey of 5,400 global users of ad industry social networking app Fishbowl released Tuesday, 82% of those working in advertising have had their clients pause or cancel projects, a reality echoed by Canadian agencies strategy interviewed as far back as March 12. The fact that there has been a universal cooling of business has also made job hunting an even bigger struggle for talent that has been let go, as well as freelancers.

Jay Kilby, who had been a group account director at Wax, said in a Facebook post that he was re-launching his former digital agency Curatr, and would be working exclusively with ex-Wax staff to complete some outstanding projects. He also directed anyone interested in getting in touch with him or other former Wax staff to contact him through LinkedIn.