London-based advertising company WPP Group Plc (WPPGY: Quote,WPP.L, WPPGF.PK) will cut a total of 7,200 jobs this year, hurt by cuts in client companies' advertising spending amid the recession, media reported Sunday, citing sources close to the company. Of the total planned job reductions, about half has already been lost, with the rest expected to go by the end of 2009.
WPP reportedly is aiming to reduce its global headcount by over 6% to 106 thousands by the end of 2009. The majority of the cuts will be redundancies, with the remainder made up by attrition. The reductions are expected in Britain, Europe and the United States, where growth has been falling as difficult economic conditions lead companies slash their advertising and marketing expenditure, the reports said.
In late April, WPP had said that in the balance of 2009, the company's short-term focus will continue to be on balancing the likely fall in revenues against staff costs and headcount.
In its trading update for the first quarter, WPP said last month that its first quarter 2009 reported revenues rose 35.9% to GBP 2.117 billion mainly on acquisitions, and revenues in constant currency were up 11.1%, reflecting the weakness of the pound sterling against the US dollar and Euro. Meanwhile, on a like-for-like basis, excluding the impact of acquisitions and currency fluctuations, revenues were down 5.8%, reflecting cuts in client spending in reaction to the global financial and economic crisis. The company also envisages a very difficult first-half, with a relative improvement in the second half.
WPPGY closed Friday's regular trading session at $34.93, up $0.81, on a volume of 103 thousand shares.
WPP.L settled at 468.00 pence on Friday at the London Stock Exchange, up 1.50 pence or 0.32%, on a volume of 1.4 million shares.
by RTT Staff Writer
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