Latest news with #FGSGlobal
Daily Mail
4 days ago
- Business
- Daily Mail
Ad firm sheds 7,000 jobs as AI revolution rips through industry
FTSE 100 advertising firm WPP has shed 7,000 jobs in the last year as the artificial intelligence revolution forces the sector though a tumultuous transition. WPP and many of its rivals have seen trade come under significant pressure over the last two years, as clients have slashed marketing spend and new AI tools have enabled more businesses to create their own marketing campaigns. The group, which cut annual guidance after a further deterioration of performance last month, has been hit by client losses and a greater exposure to China than rivals. In response, WPP has increasingly invested in its own AI capabilities. WPP's total headcount is down 3.7 per cent since the start of the year, while its total staff costs are down by 7.5 per cent compared to the first half of 2024 at £3.7billion. The firm's global workforce shrank to 104,000 by the end of June, down from 111,000. Roughly 1,400 of the total 7,000 decline comes from WPP's sale of FGS Global late last year. It came as reported operating profits plummeted 47.8 per cent year-on-year to £221million, as revenues slumped 7.8 per cent to around £6.7billion after suffering declines in every business segment and every geography it operates in. WPP told investors it expects second quarter job losses alone to generate more than £150million of annualised gross cost savings from 2026, while it would continue to back its push into AI. It said: 'We continue to prioritise investment in WPP Open, AI and data including the integration of new AI tools into WPP Open, driving day-to-day productivity improvements for our people. 'AI, data and technology are central to the way we serve our clients and continue to drive increased scope of work with existing clients. It is also supporting our new business activity.' Outgoing boss Mark Read, who will be replaced by former Microsoft UK chief Cindy Rose next month, acknowledged a 'challenging first half given pressures on client spending and a slower new business environment' Inbound boss Rose worked at Microsoft for nine years and her appointment is seen as part of the firm's recent enthusiasm for advanced tech. Read added: 'Throughout my seven years as CEO, technological innovation has been a constant and I believe that thanks to our investment in AI we can look to the future with confidence.' WPP - which owns agencies such as Ogilvy and VML – kept guidance unchanged from last month's downgrade, but halved its interim dividend to 7.5p per share. WPP shares were down 3.9 per cent to to 386.5p in early trading, having more than halved since the start of the year. Victoria Scholar, head of investment at Interactive Investor said: 'WPP faces an uphill battle amid the macroeconomic uncertainty and after the loss of some major clients. 'Winning new business has been challenging and its share price has struggled as a result - Publicis overtook WPP to become the world's largest ad agency last year '[Rose's] tech background will be valuable to WPP which is trying to navigate a rapidly changing ad landscape with the swift ascent of very high-quality AI content that risks cannibalising WPP's core offering. 'WPP hopes that Rose will lead the company to integrate AI in a way that boosts its business, rather than having AI steal it.'
The Star
21-07-2025
- Business
- The Star
Roundup: Germany unveils massive investment plan to boost economy, yet reform seen as crucial
BERLIN, July 21 (Xinhua) -- Germany's government and top corporate leaders on Monday launched a sweeping investment initiative aimed at reviving Europe's largest economy, which has faced prolonged stagnation. But the ambitious plan has met with skepticism, as business leaders warn that meaningful investment depends on long-overdue structural reforms. The initiative, dubbed "Made for Germany," was announced at a business summit attended by German Chancellor Friedrich Merz and executives from leading German and international companies. The plan envisions 631 billion euros (738 billion U.S. dollars) investment through 2028, including already announced projects, and targets key areas such as manufacturing facilities, research and development, and national infrastructure. Alexander Geiser, CEO of communications consultancy FGS Global and a co-initiator of the effort, stated on LinkedIn that over 100 billion euros of the total will come from new capital. However, no further details were disclosed. So far, 61 companies from various sectors have joined the initiative. Alongside founding firms such as Siemens and Deutsche Bank, the list includes BMW, Mercedes-Benz, Volkswagen, Allianz, Airbus, Nvidia, and several high-tech startups. "This is one of the largest investment initiatives we have seen in decades," Merz said, adding that private capital could play a vital role in bolstering public investment. Germany's economy has contracted for two consecutive years and may shrink again in 2025. A lack of public investment for years and a sharp industrial slowdown have worsened the outlook. Business confidence has also declined under the previous government's inconsistent economic policies, causing many companies to hold back on capital spending. In May, the Merz administration announced a separate 500-billion-euro fund aimed at infrastructure development and climate-related projects. It is widely seen as a potential attempt to revive Germany's sluggish investment climate. Rebuilding Germany's industrial standing through advanced technologies has also become a top policy priority. A draft of the government's new Hightech-Agenda unveiled last week outlines investments in artifical intelligence (AI), quantum computing, and climate-neutral energy as key elements of a renewed "Made in Germany" identity. According to the draft, the government plans to build at least three semiconductor plants in Germany, aiming to eventually establish the country as Europe's leading chip production hub. In addition, it targets having AI contribute 10 percent of Germany's GDP by 2030. At Monday's summit, Merz also said the initiative aligns with broader goals of digital transformation and technological innovation. Siemens CEO Roland Busch called it "a new form of cooperation between business and politics." Julia Braune, head of Germany's trade and investment agency GTAI, added that the plan sends a strong message that public and private sectors are working together to reignite economic growth. Still, critics argue that without concrete reforms, the initiative risks being little more than a publicity campaign. Some politicians and economists have questioned the feasibility of fulfilling the investment ambition. As Germany looks to reclaim its role as an industrial and innovation powerhouse, the success of "Made for Germany" may depend less on the billions pledged than on Berlin's willingness to deliver long-promised reforms. Clemens Fuest, president of the ifo Institute, said that publicity alone is not enough. "We need fundamental reforms," he warned, urging the government to reduce bureaucracy and lower taxes. Currently, Germany's investment levels remain 5 percent below their 2019 benchmark. (1 euro = 1.17 U.S. dollar)
Fashion United
02-05-2025
- Business
- Fashion United
Shein pauses London IPO as US tariffs and customs clamp down
Fast fashion giant Shein is believed to have halted plans for its London IPO as uncertainty around tariffs continues to heighten. The company is said to have not renewed contracts with two corporate communications firms that had been brought in to advise on the potential listing, according to The Times. FGS Global and Brunswick had reportedly been appointed last year to oversee the process, but it is now understood that both firms have stepped down in the wake of US President Donald Trump tightening tariffs on Chinese imports. Tensions have only escalated upon the Administration's decision to dismantle the de minimis tax exemption, which has been halted as of today, May 2. The trade loophole had previously allowed small packages worth under 800 dollars to be shipped to the US from China and other regions without having to pay duties. Trump had dubbed the exemption as a threat to US businesses, and further claimed it was often used as a means to smuggle in illicit goods. Shein's IPO had initially been scheduled to launch in the first half of 2025 after already facing a number of obstacles in the form of legal challenges and investor uncertainty. By April, the company had obtained preliminary approval for the listing from the UK's Financial Conduct Authority (FCA) and was thus waiting on backing from Chinese regulators. This week, however, details began emerging of Shein's hesitancy to move forward with the IPO. According to the Financial Times, the company was said to be mulling moving its production to countries outside of China to avoid higher tariffs. In a statement to the media outlet, an unnamed executive said that 'no one can even start to think about the IPO' as the team first figures 'out how to deal with the tariff situation'. FashionUnited has contacted Shein and Brunswick with requests to comment. FGS Global has issued no comment on the matter.
Times
01-05-2025
- Business
- Times
Shein's London IPO ‘on hold' after Trump's crackdown on China
Shein has cut ties with two UK corporate communications companies brought in to support its London stock market flotation as the fast-fashion giant quietly puts its preparations on hold amid pressure from President Trump's tariff war. The Chinese-founded retailer has not renewed contracts with Brunswick and FGS Global which ended this month, The Times understands. Both companies were understood to have been brought in last year to advise on the Chinese-founded company's proposed blockbuster London float but both have now stood down. The move reflects a wider reassessment of Shein's initial public offering strategy amid mounting pressure from Trump's proposed tariff crackdown on Chinese goods. • Can Shein save its flotation from tax and ethical worries? Shein, valued at £50 billion, had initially targeted the
Daily Mail
25-04-2025
- Business
- Daily Mail
WPP boss says US tariffs have not yet massively hit client spending
WPP's chief executive has said recent US tariff measures had not led to a 'significant change' in client spending. Mark Read said the FTSE 100 group, one of the world's largest advertising agencies, was upholding its annual guidance amidst the 'challenging economic environment.' He acknowledged the tariffs would 'impact a number of our clients' even if WPP is not 'directly affected' by them. 'At this point, we have not seen any significant change in client spending,' observed Read, who succeeded Sir Martin Sorrell as WPP's boss seven years ago. His remarks came as WPP declared its revenue declined by 5 per cent to £3.2billion during the first quarter, and 0.7 per cent on a like-for-like basis. Reported turnover in its public relations arm plunged by 39.5 per cent to £167million following the $1.7 billion sale of its majority stake in communications consultancy FGS Global to private equity giant KKR. Reassurance: WPP's chief executive, Mark Read (pictured) has said recent US tariff measures had not led to a 'significant change' in client spending At the same time, like-for-like sales minus pass-through costs shrank by 2.7 per cent to £2.5billion, partly due to customer assignment losses in the UK, Europe and China. Trading in Britain was also affected by pressure on project-based spending in the healthcare and automotive industries. Yet the company noted that its 25 biggest clients achieved growth of 2.5 per cent thanks to a 'robust performance' in the consumer packaged goods sector and a 'further improvement' in technology and digital services firms. Aarin Chiekrie, equity analyst at Hargreaves Lansdown, warned that if tariffs lead to an economic slowdown and WPP's clients have to cut costs, 'advertising budgets will likely be one of the first things on the chopping block. 'WPP hasn't seen client behaviours change yet in response to tariffs, but the picture can change quickly.' The business expects headline operating margins to flatline this year, alongside a possible fall in like-for-like revenue less pass-through costs of up to 2 per cent. By comparison, French rival Publicis Groupe, which owns Saatchi & Saatchi, forecasts annual organic sales growth of between 4 per cent and 5 per cent. Its net revenue rose by 9.4 per cent in the first quarter, boosted by gaining major new business from the likes of Subway, Santander, and Coca-Cola. Among WPP's recent client wins have been L'Oreal, Levi Strauss, Italian insurance giant Generali, and video games maker Electronic Arts. WPP shares were 0.6 per cent down at 563p on early Friday afternoon, meaning they have contracted by around a third since the year started.
