WPP Aims To Cut £500 In Costs In AI Race

WPP has unveiled a sweeping restructuring programme aimed at stripping out £500mn of annual costs by 2028, as new chief executive Cindy Rose attempts to reverse a prolonged period of underperformance and restore the advertising group to growth.

The UK-listed company will simplify its sprawling structure, sell non-core assets and cut duplicated roles across the business in what Rose described as a decisive reset. The overhaul comes after WPP dropped out of the FTSE 100 and saw its shares sink to an 18-year low amid mounting competitive and technological pressures.

Rose, appointed last summer after leading Microsoft’s UK operations, said WPP’s struggles were rooted in excessive organisational complexity and inconsistent execution. She plans to reshape the group from a loose holding company of hundreds of business units into a more integrated organisation built around four core divisions: WPP Media, WPP Creative, WPP Production and WPP Enterprise Solutions.

The company is targeting £500mn in gross annual savings by 2028, largely through eliminating duplication in support functions, streamlining real estate and offshoring some shared services. The cost of implementing the restructuring, including job cuts, is expected to total around £400mn over the next two years. Savings will be reinvested into growth initiatives, particularly in artificial intelligence capabilities.

WPP is committing about £300mn a year to develop WPP Open, its AI-driven marketing platform, as it seeks to respond to rapid technological change reshaping the advertising industry. AI tools are increasingly capable of automating creative production, media planning and analytics, posing a structural threat to traditional agency models.

The urgency is reflected in WPP’s latest results. Revenue less pass-through costs fell 10.4 per cent to £10.2bn over the past year, while pre-tax profit declined by more than a quarter to £1.1bn. The group expects like-for-like revenue on the same basis to decline in the mid to high single digits in the first half of 2026, before improving later in the year. Rose is targeting stabilisation in 2026 and a return to growth in 2027.

The restructuring will also seek to end internal competition between agencies. While individual brand names will be retained, creative, PR and design businesses will be grouped under WPP Creative and encouraged to share back-office functions. Incentives will be aligned so that agencies pitch collectively, with bonuses linked more closely to overall group performance than to individual unit results.

Analysts reacted cautiously, with shares falling more than 6 per cent in early trading as some questioned whether the cost cuts go far enough given the scale of disruption facing the sector. WPP has lost key accounts to rivals including Publicis, intensifying concerns about its competitive position.

Rose indicated that asset disposals are under review following a comprehensive portfolio assessment, though she declined to identify specific candidates. Market speculation has suggested that PR firm Burson could be among the non-core businesses considered. She downplayed the prospect of shifting WPP’s listing to the US, saying her immediate focus remains on improving operational performance.

Recent client wins, including work for Reckitt, Henkel and the UK government, offer some encouragement. Rose argues that a simpler, more integrated structure will make WPP easier for clients to navigate and better equipped to compete in an industry being reshaped by data, automation and platform economics.

The plan represents one of the most significant overhauls in WPP’s history. Whether £500mn of savings and a renewed push into AI will be sufficient to restore sustained growth remains uncertain. What is clear is that the new chief executive has little time to prove that simplification and strategic clarity can revive a business that once defined the global advertising model but now faces profound structural change.