Revenue of IPG declines in Q2, while profits rise, in preparation for its acquisition by Omnicom.
Interpublic Group (IPG), a leading advertising and marketing services company, has announced a series of measures aimed at reducing costs and streamlining its operations in preparation for its acquisition by Omnicom Group, expected to be completed in the second half of the year.
According to CEO Philippe Krakowsky, IPG has reduced its headcount by 6% year over year, with a 6% organic headcount reduction as well. This restructuring has led to a decrease in salaries and related expenses, which now account for 63.4% of net revenue, down from 66.9% in the previous year.
The company has also incurred restructuring charges totaling $118 million in Q2 2025, with expected total charges between $375 million to $400 million by the end of the year. These charges cover severance, lease terminations, and other cost-saving measures aimed at transforming the business and driving structural expense reductions.
IPG's efforts have not gone unnoticed. The company posted a record Q2 adjusted EBITA margin of 18.1%, a 350 basis point improvement from the previous year, largely driven by these structural cost reductions and efficiencies from the strategic transformation.
Moreover, the company is launching Agentic Systems for Commerce, a new AI-powered commerce platform being piloted by nearly two dozen global clients. IPG's Interact AI platform is already being used daily by 40% of employees.
The strategic transformation program at IPG is focused on improving efficiency by greater functional centralization and leveraging enterprise-level technology platforms. This is designed to reduce structural costs significantly and enhance their service offerings, particularly in media and healthcare sectors.
The transaction, which was cleared by the FTC, is expected to be completed in the second half of the year. Krakowsky has also mentioned that new business performance this year is showing marked improvement in the food and beverage, financial services, and tech and telecom sectors.
In conclusion, Interpublic Group’s cost-cutting and restructuring efforts ahead of its acquisition center on a comprehensive strategic transformation involving structural expense reduction through centralization and technology, significant restructuring actions with associated charges, workforce cost cuts, and margin improvement, all targeted for completion by the end of 2025 to facilitate a smoother acquisition process.
- The momentum of Interpublic Group's (IPG) strategic transformation, driven by cost reductions and technology, is showing growth in the financial services, tech and telecom sectors, enhancing their business performance this year.
- With the completion of the acquisition by Omnicom Group, the technology-led transformation of IPG, including Agentic Systems for Commerce and Interact AI platform, is expected to drive further growth and structural expense reductions, particularly in the media and healthcare sectors.
