WPP's new CEO simplifies ad group to save 500 million pounds by 2028

By Paul Sandle

LONDON, Feb 26 (Reuters) - WPP WPP.L will combine its agencies into a single integrated company under new CEO Cindy Rose's turnaround plan, targeting a return to growth in 2027 and 500 million pounds ($676 million) of annual cost savings by the following year.

Once the world's largest advertising holding group, WPP has been overtaken by France's Publicis PUBP.PA, which used its early lead in data analytics to win major accounts.

Rose, who became CEO in September, will bring Ogilvy, VML and AKQA together under a new "WPP Creative" umbrella to cut back-office duplication and better deploy the group's AI tools.

WPP Creative will sit alongside WPP Media, WPP Production and WPP Enterprise Solutions in the new structure.

"Today we are unveiling a bold plan for a simpler, more integrated WPP that's fit for the future," Rose said.

But the short-term outlook remains bleak.

WPP forecast a mid- to high-single digit decline in like-for-like revenue less pass-through costs in the first half of 2026, worse than analysts expected.

Publicis has forecast organic growth of 4% to 5% for 2026.

Shares in WPP, which have lost 64% of their value in the last 12 months, fell as much as 10% to 245 pence, their lowest level since 1998.

Citi analysts said the plan could deliver, but given WPP's underperformance, investors wanted to see evidence of an organic recovery.

FORMAL SALES PROCESSES STARTED

Rose declined to say where jobs would be cut or which businesses might be sold, but said assets had already been identified and a formal process had started.

She said she was "doubling down" on WPP's agency brands, and arming them with WPP's full data and AI capabilities.

Creatives will be incentivised on WPP's overall performance rather than individual agencies, to encourage collaboration and stop the long-running practice of WPP agencies pitching against each other.

Rose said the shift was already working, with WPP ranking first in new business in the fourth quarter for the first time since 2020, according to JP Morgan.

Momentum has continued into 2026, with wins from Jaguar Land Rover, Estee Lauder and others already exceeding the total for 2025, she added.

The group, built by Martin Sorrell, reported a 5.4% drop in like-for-like revenue less pass-through costs, known as net sales, in 2025. Headline operating profit fell 23% to 1.32 billion pounds.

($1 = 0.7394 pounds)