WPP cuts revenue guidance amid tech giant marketing cutbacks

After massive layoffs earlier this year, technology giants have found one more item to slash: marketing budgets.

Several large advertising companies reported a sharp cutback in spending from U.S. tech and telecom companies, which had recently become some of the largest marketers in the world.

WPP Plc shares dropped as much as 8%, the most in a year, on Friday as the UK-based advertising group cut its revenue guidance for the full year, citing lower sales in the U.S. from tech clients. “It took us a little bit by surprise,” CEO Mark Read said in an interview. 

Revenue growth excluding pass-through costs will be 1.5% to 3.0% for the full year, WPP said in a statement on Friday. It had previously guided for 3% to 5%. Revenue excluding pass-through costs for the first half was £5.8 billion ($7.4 billion), a 2% increase from a year earlier on a like-for-like basis, WPP said. Analysts surveyed by Bloomberg were expecting sales to grow to 3%.