WPP Scangroup faces potential job cuts post $30-million lawsuit by Kenyan tycoon Bharat Thakrar

Omokolade Ajayi -

WPP Scangroup, the Kenyan unit of UK advertising giant WPP Plc, is embarking on a strategic restructuring plan that could result in job cuts. This follows a $30.2-million lawsuit filed by Kenyan advertising magnate Bharat Thakrar against both WPP Plc and WPP Scangroup, along with their directors.

Following Thakrar’s legal action against WPP Plc and WPP-Scangroup, along with their directors, the company, under the leadership of Patricia Ithau since March 2022, has announced a restructuring initiative. This decision, triggered by the challenges in meeting revenue targets, aims to align the firm with market demands and macroeconomic trends.

WPP Scangroup revamps Kenya creative unit, creates new tech roles

A spokesperson from WPP-Scangroup confirmed that the company’s creative business in Kenya, specializing in advertising and communication solutions, is undergoing a restructuring process aimed at enhancing capabilities and efficiency.

The restructuring involves the creation of new roles focused on areas such as content, data, strategy, and technology while modifying existing roles to meet global standards. However, the process may also lead to reductions in key positions to improve departmental efficiencies.

WPP Scangroup grapples with legal, financial challenges

The ongoing legal battle between Thakrar and WPP Plc, alongside WPP-Scangroup and its directors, highlights corporate governance complexities and allegations of misconduct in the advertising industry. As the case unfolds in Nairobi’s courtrooms, it bears significant implications for the future direction of WPP-Scangroup and the advertising landscape in Kenya.

WPP-Scangroup’s recent restructuring follows a profit warning issued in November 2023. The company cited a subdued economic environment leading to cautious client spending on advertising and communications. The firm also reported significant costs associated with staff retrenchment.

Amidst these financial challenges, WPP-Scangroup shares are trading at Ksh2.18 with a market capitalization of Ksh942 million ($6.65 million). Thakrar’s 10.5 percent stake in the company is currently valued at Ksh98.9 million ($0.7 million).