The abrupt and sweeping nature of Omnicom’s restructure surprised many people inside and outside the company when chief executive John Wren announced the news at the start of December, following the completion of the Interpublic takeover.
It was not only the decision to kill off DDB, FCB and MullenLowe and make 4000 redundancies by the year-end, but also to part ways with so many of IPG’s top leaders and, significantly, to lose another 10,000 roles by selling and exiting non-core and smaller agencies, such as R/GA, which has been happening quietly during the past 12 months.
Total headcount will be in the region of 105,000 after the restructure, compared with 128,000 for Omnicom and IPG at the end of 2024. That is an 18% reduction, which gives a sense of the scale of the reshaping by both companies that went on all year as they prepared to complete their deal.
Campaign understands AlixPartners, a management consultancy with expertise in restructuring, played a key advisory role and crunched some of the numbers ahead of this month’s huge agency shake-up. An Omnicom spokesperson said: “Omnicom and IPG integration teams led the planning and closing of the deal, supported by several third-party consultants.”
AlixPartners is not well known in agency circles but has taken an interest in the sector. During the pandemic, it published a report, Making the Ads Add Up, in which it warned of pressures on big agency groups and urged them to “create opportunities for future growth from a lower cost structure”.
The scale of the Omnicom shake-up shouldn’t come as a complete surprise because the $9-billion IPG deal was the biggest acquisition in agency history.
It looks very much as if Wren is using the IPG integration as a broader, one-time opportunity to reorganise Omnicom, resize the cost base (an initial target of $750 million in “annual synergies” was regarded as modest by some analysts) and get rid of unwanted assets. In UK financial circles, such a move is sometimes described as “doing a kitchen sink”, as it involves a lot of upheaval and re-plumbing in one go, rather than taking more time.
Wren was first rumoured to be looking at large-scale agency M&A in summer 2023, as I wrote at the time, and it seems likely that he mulled the idea of a major restructure for years. After all, he worked on the “Big Bang” merger of agencies to create Omnicom in 1986 and plotted the failed “merger of equals” with Publicis Groupe in 2013.
The IPG acquisition brings financial benefits, as Omnicom has gained scale, revenues and cashflow, and it has reduced competition because the four biggest agency groups have become three — along with Publicis and WPP.
However, Wren has not added as many people or revenue as might previously have been thought, given those 10,000 roles across the two groups that are coming off the payroll through the disposal of smaller agencies, in addition to the redundancies.
The new Omnicom is “slimmer”, as analysts at Barclays said in a thoughtful report, published a week after the restructure, which asked whether the enlarged company can close the gap on market leader Publicis in media and data and whether it can cope with the impact of artificial intelligence on agency remuneration.
Changing how Omnicom operates requires shift in mindset and incentives
Arguably the most pressing question for staff and clients is: will the “new Omnicom” operate differently compared with the old Omnicom?
At first glance, the new structure does not look like a break with the past. Omnicom will operate nine “Connected Capabilities”, which were previously known as groups, each with a CEO. Eight leaders are existing Omnicom executives (they are all men).
The nine capabilities are Omnicom Media, Omnicom Advertising, Omnicom Public Relations, Omnicom Production, Omni and Flywheel Commerce Network (for data), Diversified Agency Services, Omnicom Health, Omnicom Branding and Omnicom Precision Marketing.
Most of IPG’s agency assets are being inserted into those nine umbrella units and, in some cases, broken up. FCB and Omnicom’s DDB are largely being rolled into BBDO, and MullenLowe is being merged into TBWA, although it varies in some countries.
It is evident that media, which is keeping six global networks (for the time being), including three from IPG, is in the ascendancy. Creative will have on only three networks, although it will keep more than a dozen boutique shops, so it still has a broad offer.
Multiple observers note some of the most senior IPG media executives to survive the Omnicom cull are involved in principal media, a growing source of revenue as an agency buys inventory at scale and adds data to create digital products that are meant to drive better results for clients.
A former IPG executive says its media operation, IPG Mediabrands, and its data arm, Acxiom, acquired in 2018, struggled to gel. Getting media and data to combine for clients will be a major test for the new Omnicom in the biggest global pitches such as Mars, which Publicis won earlier this year.
Omnicom’s move to “Connected Capabilities” is all about breaking down silos to drive integration between disciplines for clients. That requires a mindset shift given Omnicom’s historic federated model and past focus on “best in breed” agencies across the portfolio.
It is also significant that Wren is creating new incentives to encourage internal collaboration and beefing up its client service with a cadre of “Client Success Leaders” at the “Omnicom level”.
Insiders and some rivals say privately that Omnicom has struggled to win integrated clients, but Wren pushed back at that suggestion in an interview with Campaign. “We haven't done poorly in anything” and “that's competitive nonsense”, he responded.
IPG’s recent successes in winning integrated accounts from Bayer and NatWest suggest Omnicom may be able to learn something about collaboration from the acquired company.
Big challenges remain execution and company culture
January will mean the start of a new financial year and a chance to look ahead, in Omnicom’s 40th anniversary year.
Wren will want to deliver value for shareholders, and it was telling that on 26 November, the day the deal completed, the company announced a 14% increase in its quarterly dividend.
Omnicom’s stock price has risen more than 10% from $71.50 to $80 in the last fortnight since completing the all-stock deal and revealing its restructure, even if it remains below the $103 level at which it sat before the IPG takeover was first announced.
It is important to remember IPG has been a lacklustre performer in recent years and Omnicom has bought a shrinking business. Organic net revenue growth was flat in 2023 and 2024 and declined 3.3% in the first nine months of 2025.
By contrast, Omnicom has grown fairly steadily by between 3% and 5% annually since the pandemic bounceback. The agency group reports growth on a gross basis, which includes non-billable expenses, which can slightly flatter the top line, according to analysts. That could mean IPG’s numbers could be less of a drag when they are incorporated in Omnicom’s revenues.
The big challenges remain execution and company culture. It will take time to bed in IPG’s agencies, especially with so many leaders exiting.
The shockwaves might take time to play out. Redundancies are never easy but the manner of the cuts has left some insiders feeling bruised. Switching senior executives between agency networks could also be disruptive.
WPP has had a troubled record of merging and restructuring its own agency portfolio over a protracted period, although Omnicom appears keen to avoid those mistakes by moving fast.
In the meantime, competitors will hope to poach business and staff while some clients may use the upheaval to push for better terms.
“Client and talent losses could happen,” Barclays warned, noting the demise of DDB, FCB and MullenLowe could be unsettling. The investment bank added that it expects Omnicom to make further redundancies in 2026, although Omnicom has consistently maintained client-facing roles will be protected.
Wren’s takeover of IPG has always had industrial logic in a sector that was ripe for consolidation and struggling to keep up with the pace of change in marketing.
Now Omnicom must prove its new structure is about more than cutting its way to growth.
