 Mark Read |
WPP chief Mark Read is expected to slash 3,500 jobs as part of his three-year "radical evolution" plan to bolster growth at the beleaguered ad/PR conglom by repositioning it as a streamlined creative technology company.
The firm will take a $375M restructuring charge that is promised to result in $350M in annual savings by 2021.
The reorg will involve office shutdowns, "right-sizing of under-performing units," establishing a shared services infrastructure and development of "campus co-locations."
No further elimination of brands is anticipated following the dropping/merging of the J. Walter Thompson, Young & Rubicam, Wunderman and VML names.
Half of the restructuring savings, according to Read, will be plowed back into WPP as it renews its commitment to creativity, with a focus on the US, and technology.
He told investors the communications sector faces "structural change, not structural decline."
WPP's revamp is "adapting at speed to capture these opportunities and to become even more client-centric."
Read's WPP will have a "refreshed brand identity" created by its Landon and Superunion units.
As a "creative technology company," WPP will be a simpler operation focused on communications (PR, advertising, content, media, PA and healthcare), experience, commerce and technology.
Experience, commerce and technology currently generate 25 percent of WPP revenues.
Read, who took over following the April ouster of WPP founder Martin Sorrell, expects 2018 like-for-like revenues will decline by 0.5 percent.
He views next year as "one of investment in the business with the execution of our cost-savings program and further actions taken to return the company to long-term sustainable growth."
Read warned that "previously announced account losses will create the anticipated headwind, particularly in the first half of the year."
WPP CEO Cindy Rose declares her stabilization plan is "firmly on track" as the company reports a 4.7 percent dip in 1H revenues.
FTI Consulting reported a 2.6 percent drop in Q2 strategic communications revenues to $100M, a shortfall largely due to a $7.4M decline in pass-through revenues.
Omnicom CEO John Wren reported a 7.2 percent rise in Q2 “core operations” to $6B and a 6.1 percent spurt on an organic basis.
Publicis Groupe’s H1 net revenues inched ahead by 1.1 percent to $8.3B. Organic growth hit the 4.7 percent mark.
Public Policy Holding Company grew 27.5 percent to $50.1M during Q1, powered by the accelerating contribution from recent acquisitions and a 5.1 percent hike in organic revenues across its three operating segments.
