WPP’s Radical Restructure: A Harbinger of AI’s Impact on the Advertising Industry
The advertising giant WPP is undergoing a dramatic overhaul, merging its core agencies and bracing for job cuts. This isn’t simply a response to recent financial underperformance – a 3.6% drop in revenue and a 26% fall in profit before tax in 2025 – but a direct reaction to the accelerating threat of artificial intelligence. The move signals a broader trend: the advertising landscape is being fundamentally reshaped, and companies must adapt or risk being left behind.
The AI Revolution and the Future of Ad Agencies
WPP’s plan to achieve £500 million in annual savings by 2028, at a cost of £400 million over two years, is heavily reliant on streamlining operations and, crucially, reducing labor costs. This follows a pattern seen at competitor Omnicom, which recently doubled its cost-saving target to $1.5 billion, with a significant portion attributed to “labour costs.” The underlying driver? AI’s increasing ability to produce advertising content cheaper and faster.
The merger of Ogilvy, VML, and AKQA under the WPP Creative umbrella is a key component of this restructuring. This consolidation aims to eliminate redundancies and create a more integrated, efficient operation. However, it also acknowledges the changing skillset required in the industry. As Mark Read, WPP’s chief executive, has stated, AI will reduce the current workforce while simultaneously creating fresh roles – roles that demand expertise in AI implementation and data analysis.
A History of Restructuring and Declining Market Position
WPP’s current struggles aren’t new. The company has faced significant challenges in recent years, including a loss of clients and a decline in market share. It fell out of the FTSE 100 at the end of last year, having lost its position as the world’s largest advertising group to Publicis Groupe in 2024. Previous attempts to address financial difficulties included job cuts – 7,200 roles in 2009 during the global recession and 7,000 in 2020 due to the Covid-19 pandemic – but these were reactive measures rather than proactive adaptations to a changing technological landscape.
The Exodus of Talent and the Rise of AI Tools
The advertising industry is experiencing a significant shift in its workforce. Recent data indicates the largest annual exodus of staff from UK advertising agencies last year, particularly among younger workers. This trend is directly linked to the growing capabilities of AI tools, which are threatening to automate many traditional advertising tasks. This has led to concerns about job security and a re-evaluation of career paths within the industry.
WPP’s Response: AI Transformation and Regional Focus
WPP is attempting to address these challenges by establishing a stand-alone division dedicated to AI transformation. This division will partner with clients to aid them integrate AI into their marketing strategies. The company is also reorganizing into four regional businesses – North America, Latin America, Europe, the Middle East and Africa, and Asia Pacific – to improve efficiency and responsiveness to local market needs.
Frequently Asked Questions
- What is driving WPP’s restructuring? The primary driver is the need to adapt to the rapid advancements in artificial intelligence and its impact on the advertising industry.
- Will there be job losses? Yes, a significant proportion of the planned £500 million in savings will come from cutting jobs, although the exact number of roles affected has not been specified.
- What is WPP doing to embrace AI? WPP is creating a dedicated AI transformation division and reorganizing its operations to become more “AI-enabled.”
- Has WPP struggled financially recently? Yes, WPP reported a decline in revenue and profit in 2025 and has seen its share price fall significantly in recent years.
Pro Tip: For advertising professionals, now is the time to upskill in areas like data analytics, AI prompt engineering, and machine learning to remain competitive in the evolving job market.
Explore more about the impact of AI on the marketing industry here.
