The Week: WPP to axe 2,000 jobs despite strong results for 2008

Sir Martin Sorrell, the chief executive of WPP, has announced that the company will make 2,000 job cuts in the coming year, despite posting a strong set of results for 2008.

WPP will gradually reduce its headcount of 112,262 by 2 per cent, bringing staff numbers in line with its expected 2 per cent fall in revenue.

The company applied cost-cutting measures last year to adjust its growth in headcount, which was around 3.9 per cent, to be more in line with its revenue growth of 1 per cent, resulting in a 2008 like-for-like growth rate of 1.3 per cent in staff numbers, about 1,000 people.

On Friday, WPP reported a 2008 pre-tax profit rise of 3.8 per cent to £747 million and revenues went up by 21 per cent to £7.5 billion.

However, the group's headline operating margin of 15 per cent fell short of its 15.3 per cent target. And it says it expected this figure to remain flat, at 14.3 per cent, for 2009.