Advertising and AI in Marketing
The Brutal Truth: AI Isn’t Eliminating Jobs. It’s Exposing the Ones Agencies Always Wanted to Cut.
The same companies laying off staff and citing AI are also the ones telling investors business is getting better. That is not a coincidence you should let slide.
14 September 2026
On 1 September, The Financial Times told the market that WPP intends to cut up to 1,000 more jobs by the end of the year. That adds to about 11,000 roles already removed since the start of 2025, bringing headcount to 97,388 as of 30 June.
That same week, chief executive Cindy Rose told reporters WPP’s new business win rate had jumped compared to last year, highlighting retained clients like Huawei, Tesco and L’Oréal. Read that again. A company claiming to win more work is still letting a thousand more people go.
That detail is the one almost everyone overlooked. Most coverage brushed off the cuts as routine cost-saving. But for agency leaders, this is not just another statistic; it is a test of vision: What kind of pressure drives a company to shrink its team while it is winning, not losing? What bold moves will leaders make, instead of letting these challenges fade into the background? Now is the moment to choose your direction before the market chooses it for you.
Quick note if this is all new to you
WPP, Omnicom and Publicis are what the industry calls holding companies. They do not make one product. They own dozens of agencies (creative, media buying, PR, production) and sell client relationships across all of them at once. For decades, their whole business model ran on people: more clients meant more staff, and staff was the product being sold, priced by the hour or by the retainer.
AI is now slicing straight through that model, because much of what agency staff once did- drafting variations, building media plans, producing first cuts of creative- is exactly what generative and automated tools now deliver, faster and cheaper.
The numbers behind the cut
Gartner’s Jay Wilson gave a fuller picture of why. In 2026, marketing budgets are stagnant at 7.8% of company revenue, and the share of that budget going to agency fees has been falling since 2023, now sitting at 19.2%, as clients redirect spend toward working media instead. Gartner’s own forecast puts agency fees at 15% of the marketing budget by 2030, and names AI as the main driver.
So this is not just a WPP problem. It reveals where agency money is flowing across the industry, and why even a company winning clients keeps cutting staff. Fewer clients are paying for headcount.
Omnicom did the same thing, on a bigger scale
In November, Omnicom closed a $13 billion-plus acquisition of rival Interpublic Group, creating the world’s largest advertising holding company, with combined revenue above $25 billion. Weeks later, it was reported from an internal memo that roughly 4,000 more job were cut to hit its cost targets, on top of the layoffs already happening at every major holding company.
Omnicom’s own framing named the cause directly: artificial intelligence reshaping creative production, and tech platforms making it easier for businesses to produce ads at scale without an agency in the room. Its synergy target for the merger has since been set at $1.5 billion a year, with $900 million of that targeted for 2026 alone.
Two of the three biggest holding companies on earth are now telling the same story, in public filings and press calls, not in a LinkedIn post about the future of work. AI is not a side effect of these cuts. It is the reason given for them.
The same warning is coming from Lagos, not just London
In July, the Association of Advertising Agencies of Nigeria held its 53rd AGM in Lagos under a theme that did not soften anything: AdVolution, the end of advertising as we know it. That is the industry’s own trade body naming the disruption, not a foreign consultancy telling Nigerian agencies what to worry about.
A month later, X3M Ideas group CEO Steve Babaeko told the Media Independent Practitioners Association of Nigeria the same thing WPP and Omnicom’s numbers are already showing: agencies cannot outcompete AI on tasks it already performs faster and more cheaply, and media buying built only on placement and ad buying will not survive on its own.
This is not abstract for Nigerian businesses either. When Meta cut roughly 8,000 jobs in May, part of the restructuring touched the sales and global operations teams that handle advertiser relationships and market support, in a country where Facebook and Instagram reach tens of millions of users, and WhatsApp Business is how a large share of Nigerian SMEs actually sell. Fewer people on the other end of that relationship is not a Silicon Valley problem.
Now look at what the client side is doing with the same technology
PepsiCo is not cutting people over AI. It is buying more of it. In April, it signed a multi-year deal with Google Cloud to run its Gemini Enterprise Agent Platform across supply chain, go-to-market, and workforce functions, on top of an existing partnership using Salesforce’s Agentforce.
Earlier in the year, at CES, PepsiCo announced a separate collaboration with Siemens and Nvidia to run its plants and warehouses through AI-powered digital twins. Early results were public and specific: a 20% improvement in throughput and a 10 to 15% cut in capital expenditure.
This is the AI story agencies love to showcase in pitch decks: efficiency, not extinction. It is real, and it is unfolding. But it is happening mostly inside the client, not inside the agency that once got paid to think for them.
The part that should worry an agency more than the layoffs
Put the two halves together. Agencies are letting go of the people who once did the work, blaming AI. Clients are building the muscle to do more of that work themselves, also crediting AI. Both trends point the same way: money is leaving agency headcount, whether the agency makes the cut or the client makes it irrelevant.
This is not only a WPP- or Omnicom-sized problem. In August, a Nigerian company called FrontOffice launched specifically to sell what small agencies used to sell exclusively: brand design, copywriting, performance-tracked ad management and strategic guidance, bundled into one AI-supported platform. Its head of product, Kenny Akinkumi, said the goal was to let a five-person team produce work that holds up against a thirty-person agency.
FrontOffice’s own pitch names the gap directly: agencies price their work for businesses that can absorb ₦500,000 or more per project and wait two to three weeks for delivery, while free tools produce work that reads like what it is. AI-backed platforms are now built to close that gap, in Lagos as much as in London.
Context Behind the Numbers
Coverage of the WPP cuts sometimes rounds the total headcount reduction differently depending on the date the article was published, since the number keeps moving. Treat any figure over 11,000 since early 2025 as approximate, not final.
Omnicom’s cost synergy target has also been reported at different figures over time: an initial $750 million estimate around the deal’s close, later firmed up to $1.5 billion annually with $900 million targeted specifically for 2026. Both figures are real; they belong to different points in the timeline.
PepsiCo’s AI activity is genuinely spread across several separate deals (Google Cloud, Salesforce, Siemens and Nvidia, and an earlier AWS agreement) rather than one single transaction with one headline number attached. Anyone who tells you it is a single deal with a clean price tag has simplified the story past the point of accuracy.
So how should we as marketing professionals approach this?
Stop trying to out-execute AI. That battle is already lost for any agency built on hours and headcount, and the WPP and Omnicom numbers prove the market knows it. Instead, agencies must reinvent themselves: invest in strategic advisory practices that help clients identify and prioritize the problems that matter, and offer tailored workshops that deliver insights and direction no platform or automation can match. These moves put the agency back at the table as a partner in judgment, not just a producer.
Sell what AI cannot replicate: judgment. Knowing which problem is truly worth solving before any work begins, and having the courage to put your name and a clear opinion behind that choice. No platform bundling design and copywriting can offer that, because it demands someone willing to be accountable for being wrong.
Be upfront with clients about where AI truly helps them, faster production, cheaper testing, real efficiency like PepsiCo is achieving; instead of pitching AI as a magic fix for everything. The clients who are paying attention already see the difference, and pretending otherwise loses more trust than it gains.
The part that is really about your business
Strip away the layoffs, and this becomes a story about who still gets paid for judgment, and who was only ever paid for output.
WPP and Omnicom grew big by delivering output, by having enough people to make enough things. That is precisely what AI replaces most cheaply, which is why the deepest cuts land there. PepsiCo is investing in AI to get more output for less, making the same trade from the client’s side.
The businesses that keep earning through this shift will be those whose value was never just about output. That is worth reflecting on, because it is the same gap that will decide who survives the next five years, not just the latest headlines.
SOURCES
The Drum, WPP job cuts and the holdco model reshaped by AI
HRK News Bureau, WPP to cut 1,000 more jobs as AI reshapes global advertising
Marketing Dive, Omnicom outlines new agency structure as IPG deal sharpens AI, data focus
The Gallant News, AI is not the end of advertising: AAAN challenges agencies to evolve
AllAfrica, media agencies must move beyond ad buying to survive AI disruption
PepsiCo Newsroom, PepsiCo deepens AI capabilities with Google Cloud
Supply Chain Digital: How PepsiCo is using AI to transform supply chain operations
Vanguard, FrontOffice launches to close marketing capability gap for Nigerian SMEs