Cindy Rose’s WPP review points to 'deep and bold restructuring': analysts

Cindy Rose’s “strategic review” points to likely “deep and bold restructuring actions”, the Bank of America has said. 

Rose, chief executive of WPP, said a strategic review was under way during WPP’s Q3 results, having described WPP’s recent performance as “unacceptable”.

The company said full details of the review would be revealed "early in the new year".

The review covers:

•  “Simplifying and integrating our client offer” and using AI “to deliver growth and business outcomes for our clients”. 

•  “Significantly improving our execution and building a high-performance culture.”

•  “Expanding our addressable market through enterprise and technology solutions.”

•  Improving finances through “operational efficiency and a disciplined approach to capital allocation”.

For the second time this year, the network has been forced to downgrade its growth forecast. At the start of the year, it predicted annual revenue would decline by between 0% and 2%. This was then downgraded to a fall of between 3% and 5% in July and yesterday (Thursday) to a decline of between 5.5% and 6%.

Barclays noted that the new strategy “hints at disposal”, with Rose saying that the business will “[prioritise] the parts of our business where we can deliver the greatest shareholder value”.

In the UK, its media network, WPP Media, had already been hit with redundancies earlier this year and subsequently faced a structural overhaul, which removed P&L responsibilities for its individual agency leaders.

The wider market

BoA and Bernstein Société Générale noted that WPP’s performance was in contrast with the other five networks. 

While WPP reported a 5.9% year-on-year decline for Q3, Publicis Groupe reported growth of 5.7%  and Havas 3.8%. Although not directly comparable, Omnicom reported growth of 2.6%.

While IPG has not yet reported, BoA expects a 1% drop in growth.

Following the Q3 results, WPP's share price plunged by 16%, with Madison & Wall saying the company “clearly recognises that its own performance was the primary cause of the outcome”.

It noted business losses contributed to this downgrade, as well as cuts to current clients' budgets, which was “implicitly” the main reason. It added: “We believe that an under-appreciated issue impacting agencies is that clients are shifting their billings directly to media owners even while continuing to work with agencies in support of their campaigns.”

Outlook

Looking forward to 2026 for WPP, JP Morgan said that a “weaker run rate into 2026 will likely drive bigger downgrades for 2026”, adding that it reflected “a step down in media growth, ongoing CPG weakness, a deterioration in tech and auto spending, and slower growth in the UK, US and Germany”.

In addition, media losses, which include Mars and Paramount, will “weigh on growth” for the first nine months of next year.

Speaking on the press call, Rose said: “No-one is more impatient or determined to improve our performance than I am and that is our immediate focus. Between now and our strategy update, it is not a period of inaction."

She added: “My management team and I will be working hard to improve performance with a real sense of urgency while building a detailed plan for future growth and success.”