WPP has unveiled plans to cut £500 million in annual costs by 2028 as part of a sweeping restructure aimed at reversing steep declines that saw operating profit collapse 71% last year.

The British advertising giant announced the savings target on Thursday alongside its 2025 preliminary results, which showed revenue down 8.1% to £13.55 billion and reported operating profit falling to £382 million from £1.33 billion in 2024.

Chief executive Cindy Rose, who took charge last year, described the company’s recent performance as disappointing but said the issues were within WPP’s power to fix. She attributed underperformance to excessive organisational complexity that prevented the company from delivering integrated solutions to clients.

The restructuring plan, branded Elevate28, will transform WPP from a holding company structure into a single operating entity organised around four core divisions: WPP Media, WPP Creative, WPP Production and WPP Enterprise Solutions.

The financial reality

Like-for-like revenue less pass-through costs declined 5.4% in 2025, with headline operating margin falling to 13% from 15% the previous year. The company employed 98,655 people at year-end, down from 108,044 a year earlier, with severance costs rising to £141 million from £61 million.

Regional performance varied significantly. North America revenue fell 4.6%, the UK dropped 7.6%, and China declined 14.3%. India provided a rare bright spot with growth of 3.8%.

WPP expects trading conditions to remain difficult through the first half of 2026, forecasting a mid to high single-digit decline in like-for-like revenue less pass-through costs before improvement in the second half. For the full year, the company anticipates a headline operating profit margin of 12% to 13%.

The £500 million target will be achieved through operating model changes, elimination of duplicate support functions, and real estate and long-tail efficiencies. Implementing the programme will cost approximately £400 million in cash, phased over two years.

Job reductions are expected as the company targets duplicated roles, though WPP has not specified how many positions will be affected. The company already slashed around 4,000 roles through July 2025, largely focused on WPP Media, whilst also reducing headcount through natural attrition.

A significant portion of the savings will be reinvested into high-growth areas, including media, commerce, high-velocity production and enterprise solutions. The remainder will support margin rebuilding as the company returns to growth.

The Three-phase plan

WPP has structured Elevate28 around three distinct phases. In 2026, the focus is on stabilising net new business performance whilst executing cost savings and rationalising the portfolio. The company aims to achieve gross run-rate savings of £250 million by year-end.

During 2027, WPP will embed its transformed go-to-market strategy supported by a simplified operating model. The company targets a return to positive like-for-like growth during this period, backed by what it describes as a fully integrated offer spanning media, creative, production and enterprise solutions.

From 2028 onwards, WPP expects to deliver accelerated, high-quality growth supported by an AI-enabled operating model, improved margins and stronger cash conversion. This is when the full £500 million in annual savings should be realised.

The strategic rationale

Rose positioned the restructure as moving WPP from an agency model to becoming “the trusted growth partner for the world’s leading brands”. The plan aims to address what the company acknowledges is a failure to consistently keep pace with evolving client needs.

Central to the strategy is WPP Open, the company’s technology platform that will serve as the operating system across all divisions. The platform is designed to enable deeper integration across disciplines whilst preserving individual agency brands and cultures.

The move to a single company structure follows Publicis Groupe, which transitioned to a unified profit and loss structure in 2019 and has since been the most profitable large advertising group. WPP’s shift represents an admission that the holding company model, which dominated advertising for decades, no longer serves client needs effectively.

Market context

The restructure comes as WPP faces multiple pressures. Clients are cutting marketing budgets, moving work in-house, and demanding more integrated solutions that span traditional agency silos. Consultancies continue encroaching on creative and strategic territory that agencies once dominated. Technology platforms like Meta and Google control increasing amounts of advertising spend directly.

WPP’s struggles aren’t unique. Omnicom recently announced its own cost-cutting programme following its acquisition of Interpublic Group. The entire holding company sector is grappling with declining organic growth and margin pressure.

However, WPP’s performance has been particularly weak. The company’s share price has fallen more than 70% over the past five years, and Thursday’s results announcement triggered a further 5% decline, hitting another 10-year low.

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The plan requires coordinated execution across multiple dimensions simultaneously. WPP must stabilise client relationships whilst restructuring operations, reduce costs whilst investing in growth areas, and preserve agency cultures whilst integrating them into a unified system.

The company will also need to maintain employee morale through a period of significant job cuts and organisational change. Talent retention becomes critical when the business depends on creative and strategic capabilities that walk out the door if key people leave.

Financial leverage is expected to rise in 2026 before reducing from 2027 onwards as the company benefits from improved operating performance. WPP maintains an investment-grade credit rating and has £4.38 billion in available liquidity, including a $2.5 billion undrawn revolving credit facility.

The verdict still pending

Rose expressed confidence that decisive action already taken demonstrates WPP is on the right path. She pointed to improved new business performance in the fourth quarter of 2025 as evidence of early momentum.

Whether Elevate28 succeeds depends on execution over the next three years. The strategy addresses real problems with organisational complexity and fragmented client service. The financial targets are ambitious but achievable if implementation proceeds smoothly.

The risk is that cost-cutting, whilst attempting major structural transformation, proves too disruptive. Clients may defect during the transition. Key talent may leave rather than navigate uncertainty. Competitors may exploit the upheaval to win business.

For WPP’s 98,000 employees, thousands of clients, and shareholders who have watched value evaporate over five years, the stakes couldn’t be higher. The company has laid out a detailed plan. Now it needs to deliver.