WPP Q2: 7,800 Jobs Gone; More Layoffs Promised; "Apocalypse Averted"

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%.

But by 31 July 2009, the number had fallen further to 105,393, WPP said. That's 7,815 fewer than a year ago (about 7 percent of all WPP staff) -- 600 more than reported.

And it will get worse, Sorrell said:

Continuation of attrition should also support savings for H2 2009 and full year 2010

The 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.

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