WPP, a leading advertising group based in London, has announced a major restructuring initiative aimed at addressing the potential challenges presented by artificial intelligence in the advertising sector. This radical shake-up involves merging various ad agencies within the company to streamline operations and reduce costs. The company aims to realize annual savings of £500 million by the year 2028, but implementing these cuts will incur significant expenses, projected at £400 million over the next two years. A substantial part of this cost-saving strategy is expected to be achieved through job reductions, though the exact number of positions affected has not been disclosed.

This restructuring marks one of the most extensive efforts by WPP to rebound from past economic difficulties, as the company has previously faced workforce reductions of 7,200 jobs during the 2009 global advertising recession, and 7,000 during the pandemic's impact in 2020. WPP's strategic decisions seem not only to target immediate cost savings but also to invest in areas identified as high-growth prospects. The plan includes the establishment of a dedicated unit focused on AI capabilities, partnering with clients to bolster their own transformation efforts in this rapidly evolving technological landscape.

As WPP reorganizes into four regional divisions—North America, Latin America, Europe, and the Middle East & North Africa—it reflects a broader trend in the industry where companies must adapt to the digital transformation fueled by advancements in AI. The reorganization indicates WPP's recognition of the evolving demands within advertising, highlighting the necessity to remain competitive and innovative as the sector grapples with new technologies and consumer expectations.