S4 Capital has reduced its headcount to 8,550, down over 5% from over 9,000 at this time last year.
In announcing the cuts in its H1 2023 results to market, Martin Sorrell’s pure-play digital advertising group said profitability in the first half reflects slower top line growth and was below its budgets.
"We have seen some salary and related benefits inflation and we continue to maintain a disciplined approach to cost management, including headcount and discretionary costs," said S4 Capital.
"We’re a significant way through our merger model, which should drive cost efficiencies in H2, we’ve brought costs and hiring under control by integrating our operational teams and have refined our structure to better reflect client need.
"We have reduced headcount and will continue to focus on aligning cost with revenue and eliminating duplication, we’ve added new senior talent in key markets, with a few more to come."
S4 Capital also said they've spent this year optimising internal teams and structure without negatively impacting levels of quality and service.
"And have put ourselves in a industry leading role by building out our AI vision, and turning that into a reality across our practices —efforts that will pay off in future growth as we enter the next wave of “software eating the world," it said.
S4 Capital reported net revenue growth of £445.5 million ($849.7 million AUD), up 18.7% on a reported basis and up 5.1% like-for-like, "reflecting the challenging macroeconomic conditions and clients’ caution".
Operational EBITDA5 came in at £36.5 million ($69.6 million AUD), up 21.3% on a reported basis and down 30.2% like-for-like, "below our initial budget reflecting slower top line growth and moderate cost growth".
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