The world’s largest advertising company, WPP, which owns agencies such as Wunderman Thompson, and GroupM announced that it will execute more rigid plan to have deep costs amid decline in sales of Quarter 1 by 3.3%. March was hardest hit month for the company’s business with net sales declining 7.9%.
The company said it expected the impact from the virus to increase in the short term, but could not say by how much. It has already set out steps to cut around 2 billion pounds in 2020 to see it through a downturn in client spending, including pulling the dividend and a share buyback. Amongst additional cost saving measures it is taking, it has introduced a voluntary salary sacrifice from over 3,000 senior roles, part-time working and some permanent headcount reductions.
COVID-19 pandemic has forced strict lockdown across globe leading to stagnation of economic activity. Companies are taking hit in sales and weak macro factors has forced them to reduce their advertisement spends.