Key facts
- WPP reduced its workforce by 1,267 employees in the first half of the year.
- The company's revenue fell over three per cent to £6.4bn.
- Revenue less pass-through costs decreased by nearly five per cent to £4.7bn.
- Operating profit declined by 2.7 per cent to £398m.
- WPP aims for £500m in cost savings by the end of 2028 through its 'Elevate28' strategy.
WPP, a prominent advertising group, has implemented significant job cuts in the first half of the year as it grapples with declining revenue. The company slashed 1,267 jobs, representing 1.3% of its workforce, as part of a broader turnaround strategy. These reductions contributed to a £216 million decrease in total staff costs, bringing them to £3.7 billion.
Despite cost-saving measures, WPP reported a revenue of £6.4 billion for the half-year, a decrease of over three percent compared to the previous year. Revenue excluding pass-through costs, a key metric for professional services firms, fell by nearly five percent to £4.7 billion. Operating profit also saw a decline of 2.7 percent, totaling £398 million.
Cindy Rose, appointed chief executive last July, is spearheading the 'Elevate28' strategy, which aims to achieve £500 million in cost savings by 2028. This plan involves eliminating duplication, simplifying the agency portfolio, and focusing on core media and advertising services. The company is currently in the 'Stabilise' phase of this strategy and is on track to achieve £100 million in savings for 2026. Total restructuring costs for the full year are projected at £250 million, with £190 million attributed to the 'Elevate28' initiative and £60 million for legacy programs.
WPP's stock performance has been weak, with a more than 20 percent drop in the past 12 months. The company also fell out of the FTSE 100 index, a significant shift from its position as a major constituent less than a decade ago. The increasing competition from large technology firms entering the media buying space has intensified pressure on WPP, contributing to its loss of the title of the world's largest holding group to France's Publicis.