WPP shares experienced a significant drop of nearly 10 percent at market open on Thursday, following the announcement of a comprehensive turnaround strategy aimed at achieving £500 million in cost savings by the end of 2028. The advertising holding group revealed this ambitious plan alongside its preliminary results for 2025, which showed a dramatic 71 percent plunge in operating profit, falling from £1.3 billion to £382 million over the 12 months to January 2026.
Elevate 28 Strategy Targets Streamlining and Growth
The cost-saving initiative, dubbed Elevate 28, represents the first phase of WPP's strategic overhaul. New chief executive Cindy Rose, who took over in September, outlined that the savings will be realized by eliminating duplication, simplifying the organizational structure, creating shared services in finance and human resources, and optimizing the real estate portfolio. Rose emphasized that all savings will be reinvested into high-growth areas, particularly the company's emerging artificial intelligence platform, WPP Open.
Years of Underperformance Prompt Drastic Measures
WPP's restructuring comes after a prolonged period of sluggish performance, with the company's share price declining approximately 69 percent since the beginning of 2025. The advertising giant has faced multiple profit warnings and was forced to reduce its dividend significantly, having already cut it in August of the previous year. Revenue also decreased by 8.1 percent during the challenging fiscal year.
The company, which dropped out of the FTSE 100 index last year for the first time in a decade and lost its position as the largest advertising firm to France's Publicis, is confronting structural challenges in the industry. These include competition from technology hyperscalers and the disruptive impact of artificial intelligence on media buying budgets.
Organizational Consolidation and Potential Disposals
As part of the turnaround effort, WPP has begun consolidating its extensive agency portfolio into three distinct channels under the WPP brand. This includes rebranding its flagship media buying company GroupM to WPP Media in May and planning to merge well-known advertising agencies such as Ogilvy and AKQA under the name WPP Creative. Despite this streamlining, Rose indicated that the company is exploring disposals of certain assets where it may not be the optimal long-term owner.
"We have identified assets that we don't necessarily feel we are the best owners for in the long term," Rose stated. "We have started a formal process to explore the options available to us, and as soon as we have something to report, we certainly will." The goal is to complete the major operational streamlining by the end of 2026 and deliver positive net new business, ultimately reviving the company's fortunes in a highly competitive market.
