WPP PLC shares fell 4.5% to 260p after the advertising group unveiled a sweeping overhaul and cost-cutting plan as new chief executive Cindy Rose acknowledged recent underperformance and set out a three-year path back to growth.
The group, which dropped out of the FTSE 100 in December, said it will move from a holding company structure to a single integrated company, streamlined into four operating units – WPP Media, WPP Creative, WPP Production and WPP Enterprise Solutions – across four regions.
"Our recent underperformance has been driven by excessive organisational complexity, a lack of an integrated operating model and inconsistent strategic execution," said Rose, the ex Microsoft and Vodafone exec who started in September.
She added: "Our intention is to stabilise the business, return to organic growth, create capacity to invest in the future and deliver attractive returns for our shareholders."
Under her 'Elevate28' plan, WPP is targeting £500 million of gross annualised cost savings by 2028. It expects around £400 million of cash costs over two years to deliver the restructuring, with a significant portion of the savings reinvested in higher growth areas.
The turnaround is structured in three phases. In 2026 the priority is to stabilise performance and execute cost savings, before targeting a return to organic growth in 2027 as a new go to market model is embedded. From 2028 onwards, WPP aims to deliver accelerated growth, improved margins and stronger cash conversion.
Central to the strategy is an AI-enabled marketing platform, WPP Open, which management says will unify capabilities and underpin a simpler, lower cost business model.