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Omnicom chief outlines cost savings as merger with IPG approaches

Omnicom has posted reported organic growth of 5.2% for Q4 and full year 2024, pretty respectable although behind Publicis Groupe but ahead of its performance in 2023. On most minds though were CEO John Wren’s observations about expected cost savings from the merger with IPG and speculation about IPG’s own performance prior to the merger. IPG reports on February 12.

In an investor call Wren (left) said initial savings would include cutting 40% of corporate expenses, including $200m million in compensation and $110 million in general & administrative costs; procurement ($150 million), IT and services ($70 million), real estate ($65 million) and administrative costs ($25 million.)

Wren said the combined company would keep IPG’s agency brands “to drive growth.” Job cuts would come from non-front line troops although how this will be assessed remains unclear. Omnicom Advertising Group, its new umbrella for creative agency networks, looks set to remain in charge of an expanded empire.

IPG has had a pretty torrid time in recent months and its performance will be keenly anticipated, particularly by Omnicom shareholders who, so far, have been less than enthused about the merger. Omnicom shares fell slightly on the results.

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