WPP reveals £2bn cost savings and support for global coronavirus campaigns
Advertising giant WPP has unveiled measures to save around £2 billion to bolster its finances as it confirmed efforts to help promote global coronavirus information campaigns.
The group – which employs around 107,000 staff worldwide – said it has been helping authorities worldwide with their hand-washing campaigns to help stop the spread of Covid-19.
It has also been working with the UK’s Cabinet Office to launch its coronavirus information service on WhatsApp to reduce the pressure on the NHS.
Details of its support for the global effort to fight the pandemic came as it announced plans to halt its share buy back scheme following the sale of a 60% stake in Kantar and suspend its final dividend in a move to save about £1.1 billion.
It added that other measures have also been taken to save up to another £800 million, including freeze staff hires, scrapping pay rises and cutting the pay of senior bosses and board members by 20% for at least three months.
WPP – formerly run by founder Sir Martin Sorrell – is also cutting costs in areas such as IT and property over 2020 to shore up its balance sheet.
The firm reported a 23.2% plunge in like-for-like revenues in China – where the coronavirus outbreak started – over the first two months of the year.
It said at the height of the crisis in China, nearly all of its workforce in the country were working remotely, but added that 55% of its staff there are now back in offices.
Greater China accounts for around 7% of its global revenues, but WPP cautioned that the spread of the outbreak globally since then is set to see a bigger impact in March and into the second quarter.
It said there has been a rise in project cancellations, while marketing and advertising activity has fallen, though it has seen a rise in demand for some of its specialist public relations and communications business.
Mark Read, chief executive of WPP, said: “We are supporting many governments and international health organisations on communications programmes to limit the impact of Covid-19 on our communities.
“The important role we are playing in helping our clients navigate a difficult time gives us great confidence in the long-term future of the company.”
He added that recent steps to sell off unwanted assets have helped raise £3.2 billion and “put WPP in a strong financial position”, with the extra cost savings measures designed to further buttress it against the fallout from coronavirus.
WPP has sold more than 50 businesses and investments in the past two years.