WPP shares plunge after turnaround plan targets £500m of savings
WPP has promised to make £500m of cost savings by the end of 2028 as part of a root-and-branch turnaround plan after suffering a halving of profit.
The FTSE 250 firm’s new boss Cindy Rose told reporters she had already “identified multiple initiatives” to deliver on its ambitious savings commitment to help turn around a years-long pattern of underperformance that the former Microsoft executive acknowledged is “not where it needs to be”.
The cost savings were the headline measure of the first phase of the group’s eagerly anticipated strategic overhaul, dubbed Elevate 28, which the holding group unveiled alongside its preliminary results for 2025. The group will seek to hit the commitment by “eliminating duplication, simplifying the organisation, creating shared services in the finance and HR [human resources] space, and real estate portfolio”, Rose said.
She also vowed to reinvest all the savings into growth avenues identified by the holding company, chiefly its fledgling artificial intelligence platform, WPP Open.
“This is really about reallocating resources into the high growth areas of our business,” she told reporters.
WPP shake-up follows years of stodgy performance
WPP’s shake-up follows a period of languid performance, which has seen the ad giant warn on profits and witness its share price fall some 69 per cent since the start of 2025.
So-called advertising holding companies have suffered from a barrage of structural headwinds, including the threat posed by artificial intelligence and tech hyperscalers taking up an increasing share of advertisers’ media buying budgets.
WPP has been one of the worst affected of the handful of remaining large holding companies. Last year it dropped out of the FTSE 100 index of blue-chip companies for the first time in decade and lost its crown as the largest advertising firm to France’s Publicis.
The cost savings are the headline measure in the firm’s bid to revive its fortunes by delivering positive net new business and completing the major streamlining of its operations by the end of 2026.
WPP has already begun focusing its sprawling portfolio of agencies into three distinct channels, all under the WPP brand. In May, it rebranded its flagship media buying company GroupM to WPP Media. And it confirmed on Thursday its telegraphed plans to bring household name advertising agencies like Ogilvy and AKQA within a single structure it has called WPP Creative. The division, also boasts PR agency Burson, will operate under a single budget as the group doubles down on its bid to simplify its structure.
Rose, who replaced Mark Read as chief executive in September, added that the firm would also pursue multiple agency disposals.
“We have identified assets that we don’t necessarily feel we are the best owners for in the long term,” she said. “We have started a formal process to explore the options available to us, and as soon as we have something to report, we certainly will.”
WPP’s shares fell nearly 10 per cent at market open, after the group revealed operating profit plunged some 71 per cent in the 12 months to January 2026, from £1.3bn to £382m. Revenue fell 8.1 per cent, over a year in which the group was forced to warn on profits twice.
In a further bid to shore up its balance sheet, WPP more than halved its dividend having already slashed it in August last year.