Last Updated Feb 10, 2009 7:55 PM EST
WPP, one of the world's biggest advertising companies, is one of those which says it is now controlled from Dublin. When we went to its headquarters, in a Georgian town house, it appeared to be deserted. We were told only eight staff worked in the headquarters and they were all "out".
WPP says it has held board meetings in Dublin and recruitment for its office there was "ongoing". Since the move to Ireland, WPP appears to have kept intact its 300-strong division - based in London, New York, Hong Kong, and Shanghai - which was previously said to "centrally co-ordinate" the company's activities.BNET previously noted the Grauniad's coverage of WPP and its tax strategy here. A taste:
-- the surprising truth is, that far from forking out Â£200m a year to the UK in corporation tax, WPP has paid very little on that score in recent years. It has instead made acquisitions and piled up debt in the UK, enabling it to claim large amounts of tax relief on the interest. WPP's Â£200m tax payments went almost entirely to other countries.BNET readers first learned of WPP's debt levels on Dec. 4. The debts are large but manageable. The ratings agency Fitch cut its assessment of WPP's debt quality and suggested layoffs and compensation reduction to balance the leverage back in November. Indeed, WPP followed suit and dozens of folks have been laid off at WPP agencies.
To sum up, WPP chief Martin Sorrell kept his company indebted, that helped him avoid tax, but to support the debt he reduced expenses by laying people off.
- See BNET's previous coverage of WPP's finances:
- WPP to Lay Off "Several Thousand" on Accounts Where Staff Cost More than 60% of Revenue
- Ogilvy Cuts 150 Jobs; First of "Thousands" Expected at WPP
- Sorrell Used WPP Stock as Collateral for Personal Loans
- WPP Leaves U.K. for Ireland to Avoid Tax
- IS WPP at Risk of Breaching Its Debt Obligations?
- Fitch Cuts WPP's Debt Rating; Suggests Pay Reductions