WPP plots to chop £500m a 12 months in prices because it merges companies in sweeping turnaround plan

WPP has announced plans to cut costs by £500million a year by 2028, as it outlined a major restructuring in a bid to boost its fortunes on Thursday. 

Job cuts are on the cards, with ‘deduplication of support functions’, real estate roles and other jobs in the firing line. The number of roles at risk is unknown.  

Amid a sweeping overhaul of the advertising group, WPP said it would offload non-core businesses. No targets have been named, but reports have surfaced suggesting PR firm Burson could be one. 

Cindy Rose, who joined the business as its chief executive last summer, said the firm would be transitioning from a holding company structure to a single company.

Instead of being a sprawling firm with hundreds of different business units, the reorganised group will have four divisions: WPP Media, WPP Creative, WPP Production and WPP Enterprise Solutions. 

WPP shares have fallen to an 18-year low and were down 6.89 per cent or 18.77p to 253.63p on Wednesday morning.  

All change: Sweeping cost-cutting measures and job cuts are on the cards at WPP 

WPP, which is battling to match the AI and data capabilities of rivals, has struggled to stem a mounting exodus of clients in recent years. The business employs around 100,000 staff globally. 

It faces a major threat from AI tools which could replicate some of its traditional services. 

Rose, former head of Microsoft in the UK, said: ‘Our recent underperformance has been driven by excessive organisational complexity, a lack of an 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.’

A sizeable chunk of the annual savings, many of which are expected to come from job cuts, will be reinvested into ‘high-growth’ areas, the business said. 

This will include the launch of a standalone division to partner with clients on AI, as it organises the group into four regional businesses; North America, Latin America, EMEA, and Asia Pacific.  

Its advertising agencies, Ogilvy, VML and AKQA, will be merged under the WPP Creative umbrella as part of the restructure.

The group said job cuts and its strategic plans would cost it around £400million over a two-year period.

WPP also unveiled a 3.6 per cent drop in comparable revenue to £13.6billion for 2025. Annual pre-tax profit slumped 26 per cent to £1.1billion. 

Last week, US rival Omnicom, which completed a £9.6billion takeover of Interpublic in November, doubled its target for annual cost savings. Again, job cuts are on the cards.