Ad group WPP in US$375m restructure

WPP has announced a 300 million pound (US$375 million) restructuring plan over the next three years following the exit of founder and former Chief Executive Sir Martin Sorrell earlier this year.

Once the world’s most valuable ad network, WPP said it will cut 3,500 of its 134,000 jobs globally, and new measures would ultimately save 275 million pounds a year by the end of 2021. Half the savings will be reinvested in businesses over the next three years, according to a statement on Tuesday.

“The restructuring of our business will enable increased investment in creativity, technology and talent and this investment will drive sustainable, profitable growth for shareholders,” said Chief Executive Officer Mark Read.

“We are fundamentally repositioning WPP as a creative transformation company with a simpler offer that allows us to meet the present and future needs of clients.”

Additional actions to position the company for growth and to streamline operations include closing unsustainable operations, disposal of under-performing businesses, re-location to newly integrated office spaces and establishment of a consistent shared service infrastructure.

Sorrell’s abrupt exit from the advertising empire earlier this year triggered concerns about how his successors will lead through a period of radical change for the industry.

The company is spending an additional US$18.7 million a year in tech assets and creative talent in the next three years, with particular focus on US markets, as the advertising agency is strengthening its foothold at a time when the industry is undergoing a fundamental shift towards the integration of data and consumer insights.

It is also seeking strategic or financial partners for its consumer data consultancy Kantar, with WPP retaining a significant minority interest and strategic links.

The company said it has already received various unsolicited expressions of interest.

WPP’s future offer will cover four sectors: communications, brand building and service experience, commerce, and technology.