Mumbai: Omnicom Group is preparing additional workforce reductions and operational shifts as it accelerates integration of Interpublic Group (IPG), aiming to deliver $1bn in annual labour-related savings by 2028 as part of a broader $1.5bn synergy programme.
The US-based advertising holding company doubled its original efficiency goal of $750m—first outlined when the IPG deal was announced in late 2024—to $1.5bn in total recurring savings. According to disclosures in its fourth-quarter results, about two-thirds of that target will come from workforce measures, including layoffs, offshoring, near-shoring and outsourcing of back-office functions.
Chief executive John Wren said the group intends to secure $900m of the overall savings by the end of 2026, with the full run-rate achieved within 30 months, or by mid-2028. Labour synergies alone are expected to reach $645m in 2026, rise to $920m in 2027 and touch $1bn the following year.
The updated plan signals deeper restructuring beyond the 4,000 job cuts announced in December soon after the IPG acquisition closed. While Omnicom declined to specify the scale or geography of further layoffs, chief financial officer Phil Angelastro told investors that duplicate corporate and network roles were already being eliminated as the two holding companies merge into a single structure. “You couldn’t keep two of everything,” he said, referencing overlapping leadership and operational functions.
As part of the integration, Omnicom is consolidating its agency portfolio—combining and rationalising networks such as DDB, FCB and MullenLowe—and reorganising around nine “Connected Capabilities” practice areas. The model centralises resourcing across agencies and removes parallel roles created under separate legacy structures.
Beyond labour, Omnicom expects to extract $240m in savings from property consolidation and another $260m from IT, procurement and other operational efficiencies. The company’s offshore delivery centres in Colombia, Costa Rica and India are set to assume a larger share of support and back-office work as the cost base shifts to lower-cost locations.
Angelastro noted that artificial intelligence is not the main catalyst for workforce changes, though automation is being assessed to improve productivity over time.
Markets reacted favourably to the expanded savings target. Omnicom shares jumped more than 15% to above $80 after the announcement, alongside the unveiling of a $5bn share buyback plan. Bank of America analysts called the higher synergies and capital return “key positives,” while highlighting the lack of 2026 organic growth guidance as a downside.
Financially, Omnicom reported a net loss of $54.5m on revenue of $17.3bn for the year, largely due to acquisition-related charges and restructuring costs linked to the IPG integration and planned agency disposals. One-off items included $347m in IPG transaction expenses and $1.2bn in restructuring charges.
The company has previously indicated that combined headcount will decline to roughly 105,000 from about 128,000 across both firms at the end of 2024, partly through divestments of non-core assets. Some analysts expect additional reductions through 2026–27, though Omnicom has said such projections are premature.
The integration roadmap and longer-term growth strategy are expected to be detailed at an investor day on 12 March, as Omnicom seeks to position the merged group as a leaner, centralised competitor in an ad market shaped by pricing pressure, digital disruption and intensifying competition.
