Mark Read, CEO, WPP
Communications giant WPP has announced a sweeping restructure of its business, with plans to cut 3,500 global jobs across its many divisions.
New chief executive Mark Read says the cuts are needed return the business to growth, with redundancies and office closures achieving savings of £275m over the next three years.
Half of that sum will be invested back into WPP, but before that can happen the company also has to shut or merge almost 200 offices.
Mark Read, took the reins of the comms giant after Sir Martin Sorrell was forced to step down as CEO following an investigation into his personal misconduct.
Read, who described the restructure as a ‘radical evolution’, said: “We are taking decisive action and implementing major change. We will achieve this while respecting the things that make WPP the great company it is today”.
He adds: “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.”
WPP’s new focus will centre on creativity and technology, and will offer a simpler, streamlined structure around the needs of its clients, it said.
The new structure will try to offset duplicated services, which the company said has resulted in an unfocused and unwieldy business.
The company hasn’t yet made clear how the plans will affect WPP Health and Wellness, which has a large number of pharma and consumer health clients, but job losses and restructuring will inevitably feature in this division as well.
It also plans to hire a further 1,000 people focusing mainly on creative and technology roles and for the next three years, it has earmarked £15m a year to invest in creativity, technology and talent.
“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,” says Read.
“As well as improving our offer and creating opportunities for clients, this investment will drive sustainable, profitable growth for our shareholders.”
The aim is to deliver organic growth at a headline operating profit margin of at least 15% by the end of 2021.