More WPP agencies to go as holding company attempts to return to growth
WPP has become too unwieldy, with too much duplication, the holding group has said, noting it needs fewer companies in order to return the business to growth.
WPP will, according to the statement released overnight, become “a more client-centric” organisation. There will be fewer companies – with those remaining being “more integrated to adapt to a changing market”. And there will be further integration at a country level “to leverage our strengths in individual markets”.
The new local branding for WPP
“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,” newly installed CEO Mark Read said.
In his statement, Read flagged the group would be looking at “right-sizing and disposal of under-performing businesses” with the closure of unsustainable operations and establishing a consistent shared service infrastructure to support 30 countries over the next five years.
Along with the changed focus, the company’s restructure aims to deliver annual cost savings of £275m by the end of 2021 and divest part of its stake in research house Kantar next year.
The holding group also conceded there were still challenges ahead.
Its “multi-year improvement program” and “cost-savings program” will not be enough, with the company admitting there will be “further actions taken” to return the company to long-term sustainable growth.
In addition, recent account losses will create headwinds as 2019 kicks off, the group said.
Despite the tough times ahead, Read said the new, more contemporary, WPP will become a leader in creativity and technology.
“The restructuring of our business will enable increased investment in creativity, technology and talent, enhancing our capabilities in the categories with the greatest potential for future growth,” he said. “As well as improving our offer and creating opportunities for clients, this investment will drive sustainable, profitable growth for our shareholders.”
It is, he said, a “radical evolution” for the legacy company.
“We describe our approach as ‘radical evolution’: radical because we are taking decisive action and implementing major change; evolution because we will achieve this while respecting the things that make WPP the great company it is today.”
The global repositioning as ‘creative transformation company’ will see the group focus on merging its creative assets with its technology and data expertise as the company looks to growing its e-commerce, technology and user experience offerings.
Read said in the statement: “What we hear from clients is very consistent: they want our creativity, and they want us to help them transform their business in a world reshaped by technology. This is at the heart of what we do.
“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. This more contemporary proposition has already helped us to win new business, including Volkswagen’s creative account in North America.”
Read’s latest moves follow the group merging the iconic J. Walter Thompson agency and Wunderman, to create Wunderman Thompson late last month and Y&R and VML to form VMLY&R earlier in the year.
Following the global announcement, WPP AU NZ announced a rebranding to reflect the global group’s focus on four pillars – communications, experience, commerce and technology.
WPP’s majority owned Australian arm announced it would be rebranding under the restructure with local executive director John Steedman saying the changes were in line with the broader direction of WPP.
“The new brand reflects a new era for WPP, and represents us as a dynamic, forward-thinking company with creativity and technology at its heart,” Steedman said.
“We are simplifying and improving our offer to capture the opportunities of a changing marketplace. Our new look reflects this approach and we’re excited about the renewed energy it brings.”
Sack 3,500 people, get a shiny new logo – great strategy.
User ID not verified.
Is there one dot for each company? And can you join the dots?
User ID not verified.
How to get more growth? Cut jobs. Can’t say enough how genius this is an idea of getting more work done for less. Quick guys, we’re not at the bottom yet, let’s have a race.
Goes to show, when the market wants more transparent, those making the greatest profits from the lack thereof become exposed.
User ID not verified.
The whole WPP saga is a giant cock up. I wouldn’t want them advising my business. And attracting good people will become impossible, thereby ensuring the decline continues.
User ID not verified.
Was that the strategy behind the new logo, slowly disappearing into illegible dots?
User ID not verified.
Great work on the logo, what’s the tagline ‘WPP – Just an illusion’.
User ID not verified.
Fire 30% of the workforce, new logo, boom! You are now a fully-trained management consultant.
User ID not verified.
Ogilvy Grey next.
User ID not verified.
Probably saved more when Sorrell was axed than they will with these 3,500 job losses.
I think the new logo means that WPP leaks like a sieve.
User ID not verified.
We’ve already got WhiteGrey…
User ID not verified.
Its 3%, not 30% reduction in staff
3500 staff out of 134000 worldwide
But what’s a factor of 10 between friends
User ID not verified.
Wait. I’m confused.
Are we now saying that Sorrell was under-appreciated, or that he left a Brexit style mess for someone else to fix??
User ID not verified.
Cut the fat down, unfortunately they’ll probably cut the lean operators
User ID not verified.
Nothing from WPPAUNZ management?
What does it mean for people in this country? How many jobs will go? Which agencies will merge?
More uncertainty
User ID not verified.
WPPAUNZ is under temporary management
User ID not verified.
AKQGrey
User ID not verified.
GreyKQA
Obviously.
User ID not verified.
I imagine most of the commentators here would complain if the company just sat there and did nothing as well .. Folks they are having a go … Maybe let’s wait to see how things pan out.
User ID not verified.