Tue, 21st May 2019
Ad giant WPP is planning to cut 3,500 existing jobs as part of a ‘radical evolution’ of the company. There are plans to create 1,000 new roles, but this will still mean that there will be thousands of workers left unemployed.
The cuts come months after the company ousted their long-serving boss, Sir Martin Sorrell. WPP described the shakeup as a radical evolution that it hopes will cut annual costs by £275 million a year. It is expected that the initial cost of the shakeup will be £300 million. The company currently employs more than 130,000 people worldwide, of which 14,000 are based in the UK. They will be cutting down on the number of duplicate posts, and hiring new workers to bolster their creative and technology operations.
The cuts will mostly be in administrative roles, as WPP will be looking to close 80 sites and merge 100 offices. They have not yet announced which areas will see the most significant cuts.
The update boosted shares in the company by 6%, although their shares are still, overall, down by around 40% compared to the previous year.
Earlier this year WPP was forced to cut sales and profit forecasts, after it reported that it had lost work from some major clients, and seen others reduce their spending. Former boss Sir Martin Sorrell says that he is currently 2-0 up against WPP, having acquired two companies to help him build his new business, which he admits may clash with WPP in some areas of operation, albeit on a smaller scale.