WPP to cut 3,500 jobs as part of restructuring
CEO Mark Read said WPP will not take up more mergers of companies. He was speaking at the company's Investor Day presentation
WPP’s radical evolution plan laid down at the Investor Day on Tuesday indicates that following the hiring freeze, the network will be cutting jobs globally. It was revealed that WPP’s restructuring will include shutting 80 offices globally and combining operations of a further 100 in locations where business is slow.
“Fewer businesses make it easier to manage, but unfortunately there will be job losses from bringing businesses together,” said Mark Read, CEO, WPP, during his presentation. The company is said to cut 3,500 of its 1,34,000 global workforce. WPP has 400 ad businesses in more than 3,000 offices in 112 countries.
Responding to a question from an analyst about further consolidation in the WPP group of companies, Read clarified that WPP will not be looking at more mergers for now.
Over the last three months, WPP has reviewed and restructured agencies that make up for 23 per cent of its revenue. Read called the mergers of VML with Y&R and Wunderman with JWT “tough choices” and added that the merged companies should be able to provide more integrated solutions to clients.
“There is nothing worse than running a company in a so-called traditional area that is doomed forever to the client,” he said.
In this new radical phase of WPP, Read said, he is banning the use of the word “digital” and veering more towards technology. WPP is positioning itself as a “creative transformation company” that uses “creativity as differentiator and technology as growth engine,” Read said.
“Any company that is not deeply investing in technology will not be successful in the next 5 or 10 or 25 years. I think it is incumbent on us to do that in the right way,” he added.
Talking about the mergers that WPP has undertaken recently, Read said the artificial difference between analog and digital is not helpful in understanding the world. “Removing those distinctions helps you get to the answer better,” he said.
Making a reference to ex-CEO Sir Martin Sorrell’s reference to Google and Facebook as frenemies, Read said those companies should be treated as “technology partners not as frenemies; as partners and also increasingly and interestingly as clients.”
He further said that WPP’s technology strategy is to become a developer of technology and not just an integrator. “We cannot compete with Google or Adobe in terms of technology, but we can leverage the spend of many large partners and stitch their systems together to give us what we need."
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