WPP Shares Surge 20% Despite 1,267 Job Cuts and 4.4% Revenue Fall

WPP shares surged more than 20% in London trading on Thursday after the advertising group reported a smaller second-quarter revenue decline than investors had feared. The rally came despite 1,267 job cuts, a 4.4% fall in first-half revenue and weaker underlying earnings.

The market reaction points to cautious optimism rather than a completed recovery. Earlier client losses are still weighing on WPP, but the pace of decline slowed sharply during the second quarter. Investors now see early signs that chief executive Cindy Rose’s Elevate28 restructuring plan may be stabilising the business.

WPP workforce falls to 97,388

WPP employed 97,388 people on June 30, down from 98,655 at the end of 2025. The reduction of 1,267 employees represents 1.3% of its workforce.

Compared with June 2025, when WPP employed 104,083 people, its headcount has fallen by 6,695, or 6.4%. The company has not provided a complete country, office or agency-level breakdown of the positions removed.

The reductions form part of a wider period of restructuring among large employers. Centrica has separately announced 1,300 British Gas job cuts affecting several offices as established companies simplify operations and reduce costs.

Revenue falls but second-quarter trading improves

WPP generated £6.37 billion in first-half revenue, down 4.4% from £6.66 billion a year earlier. Revenue less pass-through costs declined 5.6% to £4.75 billion and fell 4.7% like-for-like.

The second quarter provided the strongest evidence of stabilisation. Like-for-like revenue less pass-through costs declined 2.8%, compared with a 6.7% contraction in the first quarter. Improving client spending at WPP Media and easier year-on-year comparisons helped moderate the decline.

WPP Media fell 5.4% across the half, while WPP Creative declined 4.9%. WPP Production delivered 1.6% growth, supported by new business and stronger trading in Asia-Pacific and Latin America.

North America recorded the steepest regional decline at 6%. EMEA fell 4.3%, Asia-Pacific dropped 3.8% and Latin America slipped 1.2%. India was down 2.9%, partly because of the timing of sporting events, while China returned to growth.

Telecom, media and entertainment revenue declined 14.8%. Financial services fell 13.4%, technology and digital services dropped 9.2%, and consumer packaged goods declined 9.1%. Healthcare and pharmaceutical revenue increased 2.9%.

Job cuts help WPP protect its margin

Headline operating profit fell 3.4% to £398 million, but the headline margin increased from 8.2% to 8.4%. Lower employment and severance costs helped offset the revenue decline.

Staff costs decreased by £216 million, or 5.9%, to £3.47 billion. Severance expenses fell from £86 million to £44 million. However, WPP’s employee incentive pool more than doubled from £59 million to £130 million.

Reported operating profit rose 18.1% to £261 million, primarily because impairment charges were lower than last year. Underlying earnings remained weaker: headline profit before tax fell 7.7% to £277 million, while headline diluted earnings per share dropped 24.5% to 15.1p.

Elevate28 targets £500 million in savings

Rose launched Elevate28 in February to transform WPP from a complex holding company into an integrated group. Its operations are being organised around WPP Media, WPP Creative, WPP Production and WPP Enterprise Solutions across four global regions.

The plan targets £500 million in annualised savings by 2028, including approximately £100 million in 2026. Savings will come from eliminating duplication, simplifying management, consolidating property and technology operations, and reviewing the agency portfolio.

First-half restructuring charges reached £83 million, with £59 million related to Elevate28 and £24 million connected with older programmes. WPP expects full-year restructuring costs of about £250 million.

The company is also reviewing non-core assets and expects disposal proceeds exceeding £200 million during 2026. WPP has not identified every asset that may be sold.

AI is only one part of the restructuring

WPP is investing in WPP Open, its AI-enabled platform for connecting media, creative, production and client data. However, the workforce reduction should not be presented entirely as AI replacing employees. The programme also covers duplicated roles, agency consolidation, property savings and older restructuring measures.

Investors have responded similarly to other technology-led cost reductions. Block shares also climbed 20% alongside plans to cut about 4,000 jobs, although lasting value in both cases depends on whether lower costs eventually produce sustainable revenue growth.

Outlook, debt and dividend

Adjusted net debt stood at £2.94 billion, down £326 million year-on-year. WPP reported a £660 million net operating cash outflow, an improvement from the £1.04 billion outflow recorded a year earlier.

The interim dividend was maintained at 7.5p per share. It is scheduled for payment on November 2 to eligible shareholders registered on October 9.

According to WPP’s official interim results, management expects revenue less pass-through costs to decline by a low-to-mid-single-digit percentage in the second half. Its full-year headline operating margin forecast remains between 12% and 13%.

The share surge shows that investors welcomed the slower second-quarter decline. WPP must now prove that Elevate28 can deliver more than temporary cost relief by improving client retention, winning major accounts and eventually returning the company to organic growth.