Troubled UK advertising group WPP has announced a radical restructuring to counter the threat posed by the rise of artificial intelligence, including plans to sell assets and cut jobs.
Aiming to become “a simple, low-cost, AI-enabled business”, the London-based company plans to achieve annual savings of £500m by 2028, from a cost of £400m over two years.
Chief executive Cindy Rose, who took over last summer, said the company was “unveiling a bold plan for a simpler, more integrated WPP that is fit for the future and built to win”. It has struggled to stem a rising client exodus and is racing to match the AI ​​and data capabilities of rivals, amid fears that AI will allow clients to bring more marketing work in-house.
Without naming them, Rose said WPP had identified a number of assets it wanted to shed.
A significant portion of the cost savings are expected to come from reducing jobs. The company did not specify how many roles among its 100,000-strong workforce would be reduced, but said it would eliminate duplication in finance and support and remove some layers in the organization.
WPP’s biggest cuts since its founding in the mid-1980s were 7,200 jobs in 2009 as a result of the global advertising recession and 7,000 jobs in 2020 due to the impact of the pandemic.
A large portion of the savings will be reinvested in “high-growth” areas, such as a new division to partner with clients on AI transformation. Called Enterprise Solutions, it already employs more than 1,000 people.
The troubled company is reorganizing its vast business empire comprising hundreds of units into four core divisions: media, creative, production and enterprise solutions, focused on four regions: North America; Latin America; Europe, Middle East and Africa; and Asia Pacific.
Its advertising agencies – Ogilvy, VML and AKQA – will be brought together under the WPP Creative umbrella and will have a single back office to reduce costs but will continue as separate agencies.
Rose, who talked about job cuts when he arrived last year, said: “Our recent poor performance has been caused by excessive organizational complexity, lack of an integrated operating model and inconsistent strategic execution. While disappointing, I see great potential because it is within our power to fix all of these issues and we are already making great progress.”
His comments came as WPP reported a 3.6% decline in comparable revenue for 2025 to £13.6 billion and a 26% decline in pre-tax profit to £1.1 billion.
The company said the performance of its ad agencies deteriorated in the fourth quarter following client losses in the US and UK, further weakness in Europe and a decline in China, which was partly offset by improved performance in India and Australia. It cut its dividend by 62% to 15p for 2025.
Despite recent contract wins from companies such as Jaguar Land Rover and Estée Lauder, WPP forecasts flat revenue this year below analysts’ expectations, predicting a “mid to high single-digit” decline in the first half and an “improved trajectory” in the second half.
Following a series of profit warnings, the company dropped out of the FTSE 100 in December after almost 30 years, and lost its crown as the world’s largest advertising group by revenue in 2024 to French rival Publicis Groupe.
Just nine years ago the company was valued at £25bn, but its share price has fallen by more than two-thirds in the past year to less than £3bn. The stock fell more than 6% on Thursday.
Last week US rival Omnicom, which completed a $13 billion (£9.6 billion) takeover of rival Interpublic in November, doubled its target for annual cost savings to $1.5 billion. The announcement, which included $1 billion in savings by reducing “labor costs” by 2028, pleased investors, sending its share price up 15%.
Earlier this month, new data revealed that UK advertising agencies had the largest annual exodus of staff last year, led by younger workers, as artificial intelligence tools threaten to replace the workforce and force the industry to cut jobs and costs.
