WPP slashes jobs as revenue continues to fall
Embattled advertiser WPP slashed jobs in the first half of the year as its revenue continued to fall.
The London-listed media group cut another 1,267 employees in the first half, around 1.3 per cent of its total staffing. Across the 12 months to June, WPP has now slashed its total workforce by 6.4 per cent to 104,083 employees.
This helped cut total staff costs by £216m in the first half to £3.7bn, but an extra £51m was earmarked for restructuring costs.
The advertiser said part of the savings were “offset by a rebuilding” of its incentive pool, which more-than-doubled to £130m.
Revenue in the half came in at £6.4bn, down over three per cent from last year. Meanwhile, revenue less pass-through costs, a metric used by professional services firms that strip out costs on behalf of client, fell nearly five per cent to £4.7bn.
But shares in the group were up 25 per cent following the update as revenue in the second quarter saw a softer decline than earlier in the year.
The firm recorded a 2.7 per cent drop in operating profit to £398m.
WPP set for more restructuring in second half
WPP tapped Microsoft executive Cindy Rose as its new chief executive last July, who has been tasked with steering the turnaround of the struggling firm.
The group’s stock is down over 20 per cent in the last 12 months and last year the firm dropped out of the FTSE 100 index despite having been one of its largest constituents less than a decade ago. The entrance of big technology firms into the media buying industry has placed mounting pressure on WPP, which culminated in the group losing its crown as the world’s largest holding group to France’s Publicis.
Rose revealed her plans for overhaul in February with a strategy dubbed Elevate28 that targets cost savings of £500m by the end of 2028 and hopes to return the business to its core focus on media and advertising.
The simplification is set to be driven by a combination of eliminating duplication, staff cuts and simplifying its portfolio of agencies.
The strategy included a portfolio review with WPP expecting to in excess of £200m in 2026 as a result of selling off none-core assets. Rose said the process of disposals remains “ongoing” and “more value” may remain for the group in certain divestment.
WPP is currently in the ‘Stabilise’ part of the strategy, where the firm said it is on track for £100m in savings in 2026. It is projecting full-year restructuring costs to come in at £250m, with £190m triggered by the Elevate28 strategy and £60m for legacy programs.