* March net sales -7.9%
* Says Q2 will be worse
* Cutting more costs, cannot give an outlook
(Adds reaction, company context)
By Kate Holton
LONDON, April 29 (Reuters) - The COVID-19 pandemic is
forcing the world's biggest advertising company WPP to
accelerate its strategy of bringing its multiple agencies
together to produce work more quickly for clients battling to
cut costs.
The British owner of the Ogilvy, Grey and Hill+Knowlton
agencies said net sales fell by 7.9% in March, reinforcing
analyst expectations of a 25% drop in the second quarter.
That is obliging it to cut costs and respond to a downturn
it expects to be more severe than the 2008 financial crash.
Chief Executive Mark Read said a freeze on new hires would
force the multiple agencies to move staff around within the
holding company, while client demands for advertising to address
the pandemic have forced them to work faster than ever before.
"I think we're working in faster, more agile ways," he told
Reuters. "Work that would have taken three months in the past is
being done in a week."
Read took over the top job in 2018, vowing to simplify the
company built by his predecessor Martin Sorrell after clients
complained it was too slow and unwieldy, prompting them to take
some ad work in house and others to go directly to tech giants,
including Facebook and Google.
Seeking to marry sectoral expertise with its technology
know-how, he has merged agencies, such as the world's oldest ad
agency J Walter Thompson, with digital network Wunderman and
merged its healthcare units with other agencies.
It is focusing on cutting more costs after it set out plans
on March 31 to withdraw the dividend and share buyback to save
around 2 billion pounds ($2.49 billion) in 2020.
While the 107,000-employee group will be hit by the loss of
work from clients in the travel, autos and luxury sectors, more
than 50% of its work is for customers in consumer packaged
goods, technology and pharmaceuticals that are still spending.
Among additional cost-saving measures by WPP, more than
3,000 senior staff have taken voluntary salary cuts of up to
20%, some staff have gone to four-day weeks while an unspecified
number of jobs have been cut.
The 2019 sale of its market research arm Kantar means net
debt is at its lowest since 2007. Shares in the group, down 37%
in the last three months, were up 6%.
Leading rival Omnicom announced job cuts on Tuesday
while peers Publicis and IPG have taken other
cost-saving measures to get through the downturn.
($1 = 0.8022 pounds)
(Reporting by Kate Holton;
editing by Guy Faulconbridge, Andrew Cawthorne and Barbara
Lewis)