WPP Launches Major Restructuring for £500M Yearly Savings
WPP reveals plans to slash annual costs by £500 million by 2028 through an extensive overhaul designed to restore profitability. The strategy targets job reductions in support functions, real estate, and other areas, though specific numbers remain undisclosed.
The advertising powerhouse also intends to divest non-core operations, with Burson, a PR firm, emerging as a potential sale candidate.
New Organizational Structure
CEO Cindy Rose, who took the helm last summer after leading Microsoft in the UK, guides the shift from a fragmented holding company to a streamlined single entity. The revamped group features four core divisions: WPP Media, WPP Creative, WPP Production, and WPP Enterprise Solutions.
Key agencies Ogilvy, VML, and AKQA merge under the WPP Creative banner. The company further divides operations into four regions: North America, Latin America, EMEA, and Asia Pacific.
Financial Challenges and Market Response
Shares hit an 18-year low, dropping 6.89% or 18.77p to 253.63p on Wednesday. Employing around 100,000 staff globally, WPP battles client departures and AI disruptions to conventional services.
2025 comparable revenue declined 3.6% to £13.6 billion, with pre-tax profit tumbling 26% to £1.1 billion. Rival Omnicom, after its £9.6 billion Interpublic acquisition in November, doubles its cost-saving goals, signaling industry-wide job cuts.
Reinvestment and CEO Outlook
Savings, primarily from workforce streamlining, fuel high-growth areas like a dedicated AI client partnership division. Rose comments: “Our recent underperformance stems from excessive organisational complexity, a lack of integrated operating model, and inconsistent strategic execution. While disappointing, I see huge potential as these issues are all within our power to fix and we’re already making great progress.”
The transformation carries a £400 million price tag over two years.
