Omnicom is preparing further job reductions as it moves to save $1bn a year in labour costs by 2028, part of a broader $1.5bn annual cost-synergy target following its acquisition of Interpublic Group (IPG).
The US advertising group doubled its original efficiency estimate of $750m, first outlined when it announced the IPG deal in late 2024, to $1.5bn in total annual savings. The majority — $1bn — will come from workforce-related measures, according to details presented in its fourth-quarter results.
The savings will be phased in over three years. Omnicom expects to deliver $645m in labour-related synergies in 2026, rising to $920m in 2027 and reaching $1bn by 2028. Executives indicated that reductions will include job cuts, the relocation of roles to lower-cost markets through offshoring and near-shoring, and the outsourcing of certain back-office functions.
The announcement suggests further restructuring beyond the 4,000 redundancies revealed in December shortly after the IPG acquisition closed. A spokesperson declined to comment on the scale or location of additional job losses.
Chief executive John Wren said he aims to achieve $900m of the total savings by the end of 2026, with the full $1.5bn run-rate delivered within 30 months — by mid-2028.
Chief financial officer Phil Angelastro told investors the group has already eliminated “duplicative corporate network and operational functions” as it consolidates two holding companies into one. “You couldn’t keep two of everything,” he said, referring to executive and overlapping roles.
Omnicom is also restructuring its agency portfolio, including the integration and rationalisation of brands such as DDB, FCB and MullenLowe, and reorganising operations into nine core practice areas under what it calls “Connected Capabilities”. The changes involve the removal of duplicate positions and a shift towards a unified resourcing model.
The group will generate an additional $240m in savings from real estate consolidation and $260m from IT, procurement and operational efficiencies. It operates offshore hubs in Colombia, Costa Rica and India, which are expected to play a larger role in back-office and support functions.
Angelastro said artificial intelligence was not the primary driver behind staffing decisions, although the company is examining automation opportunities to enhance efficiency.
Investors responded positively. Omnicom’s shares rose more than 15% to close above $80 after the company announced the higher savings target and unveiled a $5bn share buyback programme. Analysts at Bank of America described the doubled synergy target and buyback as “key positives”, though they flagged the absence of 2026 organic growth guidance as a concern.
The New York-based group reported an annual net loss of $54.5m on revenue of $17.3bn, reflecting acquisition-related charges, repositioning costs and losses linked to planned agency disposals. One-off items included $347m in IPG acquisition expenses and $1.2bn in restructuring costs.
Omnicom previously said combined headcount would fall to around 105,000, down from 128,000 across both businesses at the end of 2024, partly through divestments of non-core assets. Some analysts have speculated that further reductions could follow in 2026 and 2027, although the company has characterised such estimates as premature.
The expanded cost-cutting plan underscores Omnicom’s strategy to create a leaner, more centralised operation as it integrates IPG and repositions itself in a market facing pricing pressure, technological disruption and intensifying competition.
The group will outline its longer-term integration strategy at an investor day scheduled for 12 March, where executives are expected to provide further detail on operational alignment and growth priorities.