British multinational advertising and public relations company WPP plc plans to axe thousands of jobs. According to its new CEO Mark Read, the company will create 1,000 new roles and cut 3,500 posts. CEO stands for Chief Executive Officer.
Mr. Read describes the company’s three-year plan as a ‘radical evolution’ that will deliver better performance.
WPP says its new plan will reduce costs by £275m per year. However, it will cost approximately £300 to implement it.
WPP cutting duplicated jobs
The company has over 130,000 workers globally, of which 14,000 work in the United Kingdom. The 3,500 job losses will be in areas of duplication. The new jobs will be mainly in technology and creative.
During its three-year plan, WPP intends to merge 100 offices and close another eighty. However, the company gave no indication of where geographically the cuts would occur.
WPP shares rose on the news
The company’s share price rose by 6% after it announced its restructuring plans. Over the past twelve months, its share price had declined by forty percent.
Mr. Read said:
“What we hear from clients is very consistent: they want our creativity, and they want us to help them transform their business in a world reshaped by technology. This is at the heart of what we do.”
“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. This more contemporary proposition has already helped us to win new business, including Volkswagen’s creative account in North America.”
“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. As well as improving our offer and creating opportunities for clients, this investment will drive sustainable, profitable growth for our shareholders.”
“We describe our approach as ‘radical evolution’: radical because we are taking decisive action and implementing major change; evolution because we will achieve this while respecting the things that make WPP the great company it is today.”