WPP to freeze recruitment until early 2019 amid gloomy profit forecast
WPP has asked managers to put a pause on bringing fresh talent into the business until early next year amid a gloomy full-year profit forecast.
WPP currently employs 134,000 people / WPP
According to Bloomberg, which has spoken to people familiar with the matter, a memo has been circulated telling department heads to"take urgent action" to stop recruitment immediately in order to "try and protect" the business in the coming years.
The same sources told the site that WPP's finance department regularly sends out a memo on hiring at this stage in the financial year, its tone often cautious.
The most recent email was sent on 26 October, one day after new chief executive Mark Read downgraded the company's prospects during its Q3 financial update.
WPP currently employs 134,000 people and had been forecast to add 2,000 to that number by the end of 2018. The sources said recruitment will resume at the end of Q1 2019.
A WPP spokesperson told Bloomberg: "We’ve made it clear there are priority areas for investment for growth, and these will be unaffected." The Drum has reached out to WPP for further information.
Back in October, Read cut the Ogilvy, J Walter Thompson and Group M owner's full-year revenue guidance; telling investors he expected like-for-like net sales (a key measure of its operating performance) to be down between 0.5-1% versus a previous outlook of 0.3%.
Read, who succeeded Sir Martin Sorrell earlier this year has promised "decisive action" to iron out WPP's issues, saying the company had “become too complicated” and “been too slow to adapt” to the changing nature of the marketing business.
He is fixed on a "restructuring" strategy that has included the sell-off of 16 businesses (including its stake in research arm Kantar) and the merger of VML and Y&R, but has warned investors it will "take time" to improve the holding giant's fortunes.
The report that WPP is to pause all hiring follow on from one of its biggest agencies Ogilvy UK separately offering all staff voluntary redundancy as part of its own "radical" restructuring drive.
Ogilvy PR boss Michael Frohlich, who was elevated to chief executive in February, brought the agency's sub-divisions under a single P&L earlier this year - echoing the consolidation going on within its parent firm. The push for voluntary redundancies factors into those efforts.