Britain’s advertising agencies experienced the largest annual exodus of staff last year, led by younger workers, as artificial intelligence tools threaten to replace workers and force the industry to cut jobs and costs.
The number of employees in creative agencies, which are facing intense pressure from the rollout of AI tools that could reduce or even replace the need for agency staff, fell by more than 14% in 2025.
The Institute of Practitioners in Advertising (IPA), which has been reporting on staffing in the UK advertising industry since 1959, said it was the biggest year-on-year decline since it began separately reporting staff numbers in creative and media agencies in 2004.
The IPA, which is made up of member agencies that handle more than 85% of the UK’s £22bn annual advertising spend, said the total number of employees is expected to fall from 26,787 to 24,963 in 2024.
At creative agencies, many of which are based in the industry’s heartland London, the number of employees fell by more than 2,000, from 14,775 to 12,659.
The decline has been particularly pronounced among younger workers, with the number of employees aged 25 or younger falling by 19.2% last year, as the rise of AI either eliminated jobs or caused many to reevaluate their long-term prospects in the industry. The number of employees in that demographic dropped from 3,632 to 2,936.
Overall data revealed that nearly 60% of employees who left agencies last year decided to resign.
The IPA said 24% of agencies expect to cut jobs directly as a result of AI this year – a number that triples due to the technology in 2025.
There was a 41% decline in advertised jobs across all levels of seniority in the industry last year, leading to a decline in creative agencies by almost half.
Creative agencies are also abandoning graduate recruitment as interns, trainees or school-leaver trainees – only 43% said they had taken someone on as an employee last year. This is a significant decline from the 56% reported in 2024.
James Kirkham, founder of agency Iconic, said, “These figures confirm that the agency model is gasping for air.” “The mistake everyone is making is still treating AI like an efficiency game – crunch some numbers, reduce some costs, reduce the number of employees to get the same output but with fewer people.”
He added: “Death by a thousand cuts with a spreadsheet is not the necessary change. The real, and only, step is proper creative co-existence. Agencies need to learn to co-create with AI, not outsource the process to these tools, and then they will find they can punch above their weight.”
WPP, which dropped out of the FTSE 100 for the first time in almost three decades last year as it struggled to retain clients and catch up with the AI and data capabilities of rivals, is expected to announce sweeping changes to its creative agency operations later this month.
The group, which has already axed iconic agencies like J Walter Thompson and Young & Rubicam, will now bring together its three remaining agencies – Ogilvy, VML and AKQA – under the banner of WPP Creative.
Following the publication of the IPA figures, Trent Patterson, chief executive of Publicis London, turned to linkedin A reminder to the advertising sector that the French-headquartered group has continued to perform strongly compared to rivals.
He said the IPA figures were a reminder of how challenging the market is for “many talented people at the moment”.
“We are fortunate that we are in a moment of real momentum and we do not take this lightly,” he said in a post, which included information about the various roles for which the London agency was recruiting.
IPA Director General Paul Bainsfair said the decline in staff numbers, staff turnover rates and a sharp decline in entry-level roles “raise real questions about the future potential, particularly as AI reshapes skills and ways of working”.
