WPP AUNZ implements cost cuts, reduced hours and consolidation to mitigate COVID-19 effects
WPP AUNZ says it is doing all it can to reduce redundancies as clients slash their agency budgets, pause spending and face uncertainty throughout the ongoing COVID-19 (coronavirus) pandemic.
“Many of our clients have already reduced their marketing and communications expenditure and more may continue to do so throughout this period as part of their own remedial actions,” the holding group, with agencies such as White Grey, VMLY&R, Mediacom, Wavemaker, Ogilvy and Wunderman Thompson, said.
WPP AUNZ wants to keep redundancies to a minimum
“The extent of their reduced expenditure is still unfolding, but we draw some confidence from the increased communications work we are undertaking for a select number of our high-quality clients across sectors such as government, financial services, insurance, and FMCG, in response to the immediate demands of consumers and change in consumer behaviours.”
The holding group said it was implementing immediate cost reduction actions in response to the changing market including a voluntary reduction in base salaries for board directors, the CEO and senior leadership team, as well as a voluntary program of nine-day fortnights and four-day weeks for other staff. Employees will also be encouraged to use their leave balances.
Employee costs will be further managed though a reduction in the use of freelancers, limited recruitment, a significant reduction in salary increases, and “a commitment to enhanced intra-group resource sharing”.
“Other operating cost reductions will be implemented across our group in those areas where revenue declines are expected to be the most significant and lasting. We are taking all measures we can to minimise redundancies,” the group added.
In addition, the company’s strategic transformation plan, announced to the market by CEO Jens Monsees on 24 February will be accelerated. This means many functions and assets used across the group will be consolidated, leading to “increased operational efficiencies and cost reduction opportunities”.
The group had already announced its dividend payments were cancelled.
The company ended the update to the Australian Securities Exchange (ASX) by saying it should be able to weather the storm.
“Whilst we do not at this stage have clarity on the company’s earnings outlook for FY2020, it is our view that our 2019 year-end conservative leverage position, the pre-emptive and prudent decision to cancel the dividend on 20 March 2020, and the cost control actions outlined above, put the company in a sound position to weather the current, known impacts of the COVID-19 crisis,” it said.
“Please be assured that your board and leadership team are moving swiftly and decisively to respond to and mitigate the extreme uncertainty and challenges that are posed by the COVID-19 crisis and utilise the many operational cost reduction levers under our control. Importantly, at this time we are focussed more than ever on helping our clients navigate the extraordinary operating and social conditions.”
“A significant reduction in salary increases”?
I didn’t know WPP actually increased anyone’s salary. Pay rise isn’t a phrase used in performance reviews here, forcing people to change titles to get the justified pay for that new title.
Has anyone known someone not in the exec team that actually got a pay rise without a title change?
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Just reposting this:
https://www.adnews.com.au/news/the-new-ceo-at-wpp-aunz-is-a-5-million-man
And this:
https://www.booktopia.com.au/capital-karl-marx/book/9781840226997.html
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But the big bois and gals will continue to receive their big salaries and bonuses.
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“Ahh, I love the smell of neo-liberalism in the morning. It smells like … Capitalism gone bad”
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Yes mate, at my agency, a WPPAUNZ 100% owned agency, about 40 pay increases last year. 29 without any change to title. None of those anywhere near exec level. A pay increment pure and simple. Dont bring your falsehoods here
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Incorrect, please stop or provide receipts.
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WPPAUNZ share price @ 20 cents today. Only 14 cents to go before it goes under Growth Ops @ 6 cents. How did our business become so worthless?
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Your basis for saying incorrect is just as strong as their assertion that they are correct, I know some people that did get pay rises without title changes.
So rather than they provide receipts that it’s true, you should be the one to prove otherwise as you’re disagreeing.
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I think that at this price level, WPP in UK will be pretty keen to buy it out. Market cap is $178 million only! Last year they made $138 million in earnings. Let’s say they do half of that this year. Frankly, it’s a steal. Good buy i reckon.
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So are the board still taking their bonuses?
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