WPP, the beleaguered advertising group, eliminated another 1,267 jobs in the first half of the year. The cuts marked 1.3 percent of its total staffing. Over the 12 months to June, WPP’s workforce shrank by 6.4 percent to 104,083 people.
The cuts helped slash total staff costs by £216m in the first half to £3.7bn. But the firm also spent £51m on restructuring costs. Meanwhile, it expanded its incentive pool by more than 100 percent to £130m, partly offsetting those savings.
Revenue in the half came in at £6.4bn, a decline of over three percent from a year earlier. A key performance metric — revenue less pass-through costs — dropped nearly five percent to £4.7bn. Operating profit fell 2.7 percent to £398m.
Cindy Rose's turnaround plan
Cindy Rose, the former Microsoft executive, was named chief executive in July. Her task: to steer WPP through a restructuring that is already shaping up to be costly and long term.
Rose unveiled her strategy in February, called Elevate28. It aims to save £500m by 2028 and refocus the firm on core media and advertising businesses. The plan includes cutting duplication, further layoffs, and simplifying the agency portfolio.
Pressure from tech and a fading brand
WPP’s slide has been dramatic. Its shares are down more than 20 percent in the past year, and the firm lost its place in the FTSE 100. Less than a decade ago, it was one of the index’s largest members.
Rival firms, particularly from the tech sector, have moved into media buying, putting pressure on WPP. It lost its title as the world’s largest advertising holding company to Publicis of France.
Costs and disposals to fund savings
WPP is currently in the Stabilise phase of the Elevate28 plan. It expects £100m in savings by 2026. Full-year restructuring costs are projected to reach £250m, with £190m from the new strategy and £60m from older programs.
The firm is also selling off non-core assets, expecting to raise over £200m by 2026. Disposals remain ongoing. Rose said more value may still be found in the process.