WPP chief Martin Sorrell painted a gloomy picture -- as predicted -- in his Q2 2009 earnings report today, and gave details on the number of people who have lost their jobs at his agencies. Just over 7,800 jobs have gone -- 600 more than previously reported. More layoffs are likely, WPP said.
Here's Sorrell's assessment of the current environment:
... although there is little doubt that CEOs and CMOs feel better about the general economic environment, Armageddon or Apocalypse now having been averted, there is little evidence of better heads and stouter hearts translating into stronger order-books or investments â€" at least, yet. Things look better, as they naturally should, partly because of easier comparatives.The basics: Revenue for the first six months was Â£4.289 billion, an 8 percent decline on like-for-like basis. Net income was Â£138.3 million, a 42 percent decline.
On the jobs front, WPP said staffing costs are now 62.1 percent of revenue, up from 59.9 percent last year, meaning each individual staff member is bringing in fewer revenues for their agency.
These are the layoff numbers:
- Total employees excluding "associates" in June 2009: 106,683
- Total employees excluding "associates" in June 2008: 113,208
- That's a decrease of 6,525 or 5.8%.
Continuation of attrition should also support savings for H2 2009 and full year 2010The current level of "attrition" isn't good enough, apparently:
The impact of the recession on the Group's profitability in the first half was severe. Although action was taken to reduce staff and discretionary costs, such as travel, training and personal costs, as revenues came under pressure, this reduction was insufficient as revenues fell faster than budgeted.
- See previous coverage of WPP:
- WPP's Sorrell Sets Up Best of All Worlds for Wednesday's Revenue Report
- Sorrell Between Rock, Hard Place as He Balances Debt, Stock and His Own Pay
- Did You Check Out WPP's Line of Bath and Kitchen Products?
- Wall Street Downgrades WPP on Debt Fears; Has Sorrell Reached His Credit Limit?
- Citi Cuts WPP to "Sell"; Sorrell Defends "Suicide Pact" on Pay; Attacks Obama on Taxes
- Sorrell's Comments on Procurement Reveal Opacity of Agency Billing Practices
- WPP: Sorrell Sees No New Client Dollars; Layoffs Possible in Europe; Zimbabwe Eyes an Opportunity
- Could WPP Chief Sorrell's Successor Be Lord Stephen Carter?
- Sorrell Prepares to Leave WPP Amid 7,000 Layoffs
- WPP Stock Down 11% as CEO Sorrell Gets $95 Mil. Pay Package. Coincidence?
- At WPP, Sorrell's $95 Mil. Pay Package Gathers More Foes -- But Passes Anyway
- WPP's Sorrell Wants $95 Million Pay Package; Sparks Protest at "Unnecessarily Complex" Scheme
- WPP's Sorrell Dusts Off Latest Wacky Recovery Metaphor: "An Italic L, Flipping Up"
- WPP Q1: Debt Doubles; "It's All Lehman Brothers' Fault"