WPP will be cutting 3,500 of its 134,000 workforce as part of a major restructure.
According to media reports, the ad giant will also shut 80 offices globally and merge nearly 100.
Though, to make up for the 3,500 job cuts, WPP has promised it will hire 1,000 more creatives in the coming months.
Speaking on restructure, WPP CEO Mark 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.
“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.
“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.”
According to WPP, the company will incur cash costs for the restructuring of $519m over the next three years, which will include growing agencies, addressing under-performing units and streamlining operations.
Examples given of this streamlining includes, integrating VML and Y&R, and Wunderman and J. Walter Thompson, disposing of under-performing businesses and closing unsustainable operations.
As well as this, WPP will “further development of Campus co-locations” and “establish a consistent, shared service infrastructure to support 30 countries over the next five years”.
While WPP drafted losses of $519m, it stated the annual savings from the actions are anticipated to be $476m by the end of 2021.
The statement added, “WPP will reinvest approximately half of these savings in 2019 to 2021”.
The news comes as the ad giant debuted a “refreshed brand identity” as part of the “radical evolution”.
According to WPP, the new and improved brand identity “reflects the company’s simplified offer to clients, consisting of four key pillars: communications, experience, commerce and technology”.
The identity was created by WPP agencies Superunion and Landor, with a bespoke iteration developed for the ANZ region.
The announcement follows ongoing tension between WPP and its ex-CEO and founder Martin Sorrell.
On Monday, B&T reported Sorrell was given a slap on the wrist from the CEO of WPP’s London-based The & Partnership, Johnny Hornby, who said Sorrell should stop “talking down” the company and its new CEO Mark Read.
“It’s disrespectful to them and makes him look small,” Hornby said.
“When he left in the summer the company badly needed a change of direction and strategy that Martin had not delivered and he should allow Mark to get on now unhindered,” he added.
Adding to the rancour, Sorrell recently described WPP has being a “car crash in slow motion” and that business had become too London-focused under Read.
Sorrell said: “Senior management haven’t been travelling enough and there’s a feeling that it’s Fortress Britain.”
