Omnicom plans to reduce labor costs by $1B following IPG acquisition

"Omnicom posted its first earnings report following its $13 billion-plus acquisition of rival Interpublic Group in November, but did not break out organic revenue figures, a closely watched measure of agency health. Total revenue for Q4 landed at $5.5 billion, up 27.9% versus the year-ago period, with gains partially attributed to a month of factoring in the IPG business. Media and advertising made up about 60% of revenue for the period ended Dec. 31, while precision marketing contributed 10.3% and public relations 9.1%."

"Omnicom announced it is doubling its expected cost savings from the deal, from $750 million to $1.5 billion, with $900 million in savings planned for 2026. Omnicom CEO John Wren identified three core ways the firm will generate savings, with reductions in labor costs making up the lion's share at $1 billion - a figure larger than the original cost-savings target on its own."

Omnicom reported total Q4 revenue of $5.5 billion, a 27.9% increase year-over-year, partly reflecting one month of results from Interpublic Group after the acquisition. Media and advertising accounted for about 60% of revenue for the period ended Dec. 31, precision marketing contributed 10.3%, and public relations 9.1%. The company will not disclose organic growth in quarterly presentations, though CFO Phil Angelastro estimated Q4 organic revenue around 4% excluding planned dispositions and assets held for sale. Omnicom is doubling expected cost savings to $1.5 billion, targeting $900 million by 2026, prioritizing $1 billion from labor reductions, $240 million from real estate consolidation, and $260 million from operational synergies while accelerating outsourcing, offshoring, automation and AI deployment.

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