Sorrell predicts WPP job losses in 2009

WPP’s chief executive Sir Martin Sorrell warns of possible job cuts in the group’s key markets, including the UK.

Speaking at the UBS Global Media and Communications Conference, Sorrell predicted a bleak forecast for 2009, confirming once again that jobs in Western markets will be axed as group revenue shifts towards emerging 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, there will be pressure on head count. In other words, there will be cuts,” he continued.

Last month, Sorrell confirmed he would cut costs in mature markets in order to continue to invest in emerging markets in 2009 (see Sorrell: WPP will continue to invest in emerging markets).

Speaking at the Morgan Stanley annual technology, media and telecoms conference in November, Sorrell said: “We will have to invest in those markets and take out head count in more mature markets. The key thing for us is to balance revenue and cost growth in terms of headcount.”

WPP was forced to admit that the financial crisis had hit its UK and US businesses as it reported its Q3 results, which saw just a 3% year on year revenue increase to £1.72 billion (see WPP Reveals Low Q3 Results).

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

Sorrell also forecast a more positive end to 2009, stressing once again that he expected a real world recovery by 2010 (see Sorrell Predicts Difficult 15 Months For UK Economy).

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