In a call with Bloomberg this morning, Unilever CFO Graeme Pitkethly officially confirmed the conglomerate’s status as the new P&G by promising to run “30 percent fewer ads as part of a cost-cutting drive.”
The Bloomberg writeup focuses on the damage this announcement did to WPP’s stock price: a 4.4 percent dive.
But if you look at the chart, this was nothing compared to last month’s dip, which came after Sir Martin warned of “a slow 2017” due to WPP losing the VW and AT&T media accounts to Omnicom.
Here’s the part of the story that really stood out to us:
The company, which is also selling off its spreads business, aims to reduce the number of creative agencies it employs by about half, Pitkethly said on a call with investors — a move which could benefit large agency owners like WPP.
Oh, and Unilever will also reduce the number of consultants it hires by more than 40 percent. See, not all news is bad!
This is all part of a bigger restructuring that follows the February takeover offer from Kraft Heinz (read: Brazilians’ attempts to rule the world a little bit faster). According to Reuters, investors who were a little miffed about the Kraft denial will get a $5.3 billion share buyback…and many of Unilever’s marketing partners will get screwed.
Don’t worry too much about WPP, though. Its stock hit an all-time high last summer.