Eleven thousand jobs gone since the start of 2025. Now WPP is preparing to cut up to a thousand more before the year is out, according to a Financial Times report published on Tuesday. The British advertising group, which had 97,388 employees on its books as of June 30, is shrinking again, and the stated reason is the one every white-collar industry has been bracing for: AI is making the work cheaper to do with fewer people.
The cuts are part of a restructuring led by chief executive Cindy Rose, who inherited a business that has been losing clients and trimming its outlook. Alongside the redundancies, WPP will sell non-core businesses and shrink its property footprint. In London, that means folding three separate buildings on the south bank of the Thames into two.
What the cuts are really about
Advertising was always going to be an early casualty. The industry sells two things, creative output and media buying, and generative AI is now good enough at both to change the economics. A campaign that once needed a team of copywriters, designers and planners can be drafted, localised into a dozen languages and tested against audience segments in an afternoon. Clients know this. Some are building the capability in-house, and the rest are asking their agencies why the invoice still looks the way it did in 2022.
WPP’s answer has been to reorganise around its own AI platform, WPP Open, and a cost programme called Elevate28 that targets £500 million in gross annualised savings by 2028, with roughly £100 million expected this year. Reports describe a shift away from the old holding-company model, where dozens of agency brands operated semi-independently, toward four integrated units that share tools, data and staff. Fewer brands means fewer duplicated roles, and fewer duplicated roles means fewer people.
The FT report notes that the cuts arrive amid widespread layoffs across the advertising sector, driven both by clients spending less and by AI tools making tasks more efficient. Rivals Omnicom and Dentsu have been cutting too. This is not one company’s crisis. It is a sector repricing its labour.
The other line item AI is eating
Headcount is only half the story. Days before WPP’s plans surfaced, McKinsey published its State of AI 2026 survey, and one finding in particular should worry every software vendor selling into large enterprises. Thirty-two percent of organisations said they had skipped buying at least one software product or feature because they could build it themselves using agentic coding tools. In the technology sector, that figure rose to 41 percent.
Put those two stories side by side and a pattern emerges. Companies are using AI to reduce spending on people and on software at the same time. Ad agencies are being squeezed from both directions: clients need fewer agency hours, and the agencies themselves can replace some of their own tooling with internally built systems. The savings are real, but they are being extracted from a workforce and a supplier base that spent the last decade assuming demand would only grow.
McKinsey’s survey also carries a caution that gets less attention. One in five respondents said their organisation was limiting AI use because of operating costs. Building your own tools is cheap on day one and expensive to run at scale, and the model bills arrive every month. WPP’s bet, like everyone else’s, is that the efficiency gains outrun the compute costs. That is not yet proven at the scale of a 97,000-person company.
What a smaller WPP looks like
Strip away the restructuring language and the shape of the new company is fairly clear. It will be smaller, occupy less office space, own fewer businesses and route more of its work through a single AI platform rather than through a sprawl of agency brands. The pitch to clients will be speed and lower cost. The pitch to investors will be margin.
Whether that pitch holds depends on something harder to model than headcount. Advertising’s value was never purely in production. It was in the judgement of people who knew a market, a brand and a client’s nervous chief marketing officer. If AI hollows out the production layer and the judgement layer goes with it, agencies become interchangeable, and the cheapest one wins. That is a race WPP may not want to be in.
The next test comes with WPP’s third-quarter results, when the market will look for evidence that the cost programme is delivering without accelerating client losses. For more coverage of how AI is reshaping business, visit Mylistingo.
