• Financial Times, Monday, May 4, 2009 9:45 AM

WPP will reduce staff by about 7,200, or 6%, this year to keep down costs, as the global recession hits advertising spending. About half of the cuts will come from layoffs, with the rest coming from not replacing employees who leave the company. Some 3,600 jobs were eliminated in the first three months of the year, including 2,200 layoffs. Most of the remaining job cuts are expected in the second quarter.

Job losses are likely to be concentrated in the U.S. and Europe, while headcount could actually increase in emerging markets, such as Russia, India and South America, where demand for advertising is holding up much better. WPP has seen sales decline as multinational clients, such as Ford Motor, IBM and Kellogg's, put the brakes on advertising spending. The U.S. has been the company's worst-performing region. The 6% reduction in staffing is in line with analysts' expectations that revenues at the company will decline 5% to 6% this year.

In addition to staff cuts, WPP plans to keep its acquisition spending at only about $100 million, in order to generate surplus cash to pay down debt. This will make 2009 a quiet year for the acquisitive company, which last year bought TNS, the market research group.

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