Beleaguered advertising group WPP has announced a drastic reorganization, including merging ad agencies and cutting staff, to counter the threat posed by the AI revolution.
The London-based company has set out a plan to achieve savings of £500m a year by 2028, at a cost of £400m over two years, with the aim of making it a “simpler, lower-cost, AI-enabled business”.
A significant portion of the cost savings is expected to come from headcount reductions. The company did not say how many positions would be cut.
WPP’s most significant job cuts since its founding in the mid-1980s were 7,200 in 2009 due to the global advertising recession and 7,000 in 2020 due to the coronavirus pandemic.
The bulk of the savings will be reinvested in “high-growth” sectors, it said on Thursday.
The troubled company plans to reorganize the group into four regional businesses and create an independent division to partner with customers on AI transformation. Latin America; Europe, Middle East, Africa. and Asia Pacific.
The company’s advertising agencies, Ogilvy, VML and AKQA, will be integrated under the WPP Creative umbrella as part of the plan.
CEO Cindy Rose said the company is “unveiling bold plans for a simpler, more integrated WPP that’s fit for the future.”
London-listed WPP, which has struggled to stem a growing customer exodus and races to match the AI and data capabilities of rivals, employs around 100,000 staff worldwide.
Rose, who hinted at layoffs when he took over last year, added: “Our recent underperformance has been caused by excessive organizational complexity, a lack of an integrated operating model, and inconsistent strategic execution. While disappointing, these issues are all within our power and we have already made significant progress, so we see great potential.”
Her comments came as WPP reported comparable sales for 2025 were down 3.6% to £13.6bn and pre-tax profits were down 26% to £1.1bn.
Last week, US rival Omnicom, which completed its $13bn (£9.6bn) acquisition of rival Interpublic in November, doubled its annual cost-cutting target to $1.5bn. The announcement, which included $1 billion in savings through 2028 in “labor cost” cuts, delighted investors and sent the company’s stock price soaring 15%.
WPP spends around £8bn a year on staff but is fighting for survival as its market value slumps to £3bn.
The company was valued at £25bn just nine years ago, but its share price has fallen by almost two-thirds in the past year.
The company dropped out of the FTSE 100 for the first time in nearly 30 years late last year after a series of profit warnings, and in 2024 it lost its place as the world’s biggest advertising group by revenue to French rival Publicis Groupe.
Earlier this month, new data showed that British advertising agencies experienced their biggest annual job exodus last year, mainly of junior staff, as artificial intelligence tools threatened to replace workers, forcing the industry to cut jobs and costs.
