WPP to axe thousands of jobs in Europe and North America
LONDON - WPP Group is to cut several thousand jobs, concentrated at its Western Europe and North America operations, according to a report.
Sir Martin Sorrell, chief executive of the group, held budgetary meetings with divisional heads in November and December.
The Observer quotes a company insider who said that where staff costs exceeded 60% of revenue, WPP businesses were expected to "trim back" on employee numbers to meet internal guidelines.
However, another source described rumours that WPP was cutting 10% of its workforce as "rubbish".
The report also claimed the group will be hiring more staff in developing economies such as South America, Eastern Europe and Asia and in sectors such as PR and market research.
Another WPP source contacted by Brand Republic played down the report and said the company was not preparing any announcement of redundancies and said that these would be handled by individual divisions.
WPP employs more than 100,000 people worldwide. According to its 2007 annual report, variable staff costs, which "can be used to protect margins", account for 7.4% of revenues.
Other large marketing services groups have moved ahead of WPP to reduce their workforces.
Before Christmas it emerged that US-based Omnicom was to cut 5% or 3,500 positions and Interpublic around 5% of its staff or 2,000 jobs.
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