WPP defies gloom with good results for 2008, but warns of tougher 2009

Tim Burrowes

March 9, 2009 10:04

Global marketing giant WPP has exceeded expectations with an excellent set of preliminary financial results.

The company put out guidance over the weekend that revenue and profits were both up last year, partly because it has already been squeezing its costs.

Reporting a headline profit of around $2.5bn for 2008, the company said revenue had risen by 20%. However, it warned that if, as expected, revenues fall, it will cut short term staff in particular.

In its guidance, it said: “Part of the Group’s strategy is to continue to ensure that variable staff costs are a significant proportion of total staff costs and revenue, as this provides flexibility to deal with volatility in revenues and recessions or slow-downs. These variable staff costs provide a “shock absorber” to operating margins as revenues come under increasing pressure. We estimate that at least half of these variable staff costs can be reduced in the course of a recession.”

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Tim Burrowes

Tim Burrowes is the publisher of Mumbrella and Unmade. He co-founded Mumbrella in 2008 and sister title Unmade in 2021. He's worked in the UK, Middle East, Asia & Australia and has specialised in writing about the communications world for the last 25 years. He wrote the book Media Unmade, published in 2021, and became the presenter of MediaLand on ABC Radio National in 2025.