Sorrell forecasts bleak 2009

by Nick Johnstone, mediaweek.co.uk 10-Dec-08, 13:15

LONDON - Martin Sorrell has given a bleak forecast for 2009, including job losses at WPP in key markets such as the UK.

Speaking at a UBS Global Media and Communications Conference, WPP Group's chief executive warned that as group revenue continued to shift towards emerging economies, jobs would be axed in Western markets.

Sorrell said: "In the first nine months of this year and through October and November, head count grew faster than revenues. In our business that always means trouble.

"In the developed areas of our business, the mature parts - that's the polite phrase for them - there will be pressure on head count. In other words, there will be cuts."

This contrasts with WPP taking on new staff in the younger economies of Asia, Latin America, Africa and The Middle East.

Sorrell again stressed that clients were "extremely cautious" about the first half of next year, with any improvement expected in the second half.

UK revenues next year will be internet-based, driven by search and e-commerce activities, according to Sorrell, with WPP taking 23% to 24% of the market.

He added the uncertain future of the US and European motor industries would also have an impact, with car companies constituting 8% to 9% of total WPP revenues.

The US Congress agreed this morning (10 December) to a $15bn (£10bn) bailout of its ailing Big Three motor companies, including Ford Motors, historically WPP's biggest client.

Separately, a major shake-up is currently underway within UBS' own marketing teams, with UK jobs believed to be affected.