UK advertising agencies had their biggest annual exodus of staff last year, led by younger workers, as artificial intelligence tools threaten to replace workers and force the industry to cut jobs and costs.
Staff numbers at creative agencies, which are facing acute pressure from the rollout of AI tools that reduce or even replace the need for agency staff, fell more than 14% in 2025.
The Institute of Practitioners in Advertising (IPA), which has been reporting on staffing in the UK ad industry since 1959, said it was the biggest year-on-year slump since it started separately reporting staff numbers at creative and media agencies in 2004.
The IPA, which is made up of member agencies that handle more than 85% of the UK’s £22bn annual ad spend, said the total number of employees fell to 24,963, down from 26,787 in 2024.
At creative agencies, many of which are based in the industry’s heartland of London, staff numbers fell by more than 2,000, from 14,775 to 12,659.
The decline has been particularly pronounced among younger workers, with the number of employees aged 25 or under falling by 19.2% last year, as the march of AI either cost jobs or led many to re-evaluate their long-term prospects in the industry. Staff numbers in that demographic fell from 3,632 to 2,936.
The overall figures showed that almost 60% of staff that left agencies last year chose to resign.
The IPA said 24% of agencies expected to cut jobs directly as a result of AI this year – a threefold increase on the number that did owing to the technology in 2025.
There was a 41% decrease in advertised jobs across all levels of seniority in the industry last year, led by a reduction of almost half at creative agencies.
Creative agencies are also giving up on graduate recruitment – as trainees, apprentices or school-leaver apprentices – with just 43% saying they took on any as employees last year. This is a considerable slump from the 56% reported in 2024.
“These numbers confirm that the agency model is gasping for air,” said James Kirkham, the founder of the agency Iconic. “The mistake everyone is making is still treating AI like an efficiency play – shave a few numbers, strip some cost, reduce headcount to get the same output but with fewer people.”
He added: “Death by a thousand cuts with a spreadsheet is not the transformation needed. The real, and only, move is proper creative coexistence. Agencies need to learn to co-create with AI, not outsource the process to these tools, and then they will find they can punch above their weight.”
WPP, which dropped out of the FTSE 100 last year for the first time in almost three decades as it struggles to retain clients and catch up with the AI and data capabilities of rivals, is expected to announce sweeping changes to its creative agency operations later this month.
The group, which has already scrapped prestigious agencies such as J Walter Thompson and Young & Rubicam, is to bring its three remaining ones – Ogilvy, VML and AKQA – together under the banner of WPP Creative.
After the publication of the IPA figures, Trent Patterson, the chief executive of Publicis London, turned to LinkedIn to remind the ad sector that the French-headquartered group continued to perform strongly compared with rivals.
He said the IPA figures were a reminder of how challenging the market was for “many talented people at the moment”.
“We’re fortunate to be in a moment of real momentum and we don’t take that for granted,” he added, in a post that contained information about a range of roles for which the London agency was hiring.
Paul Bainsfair, the director general of the IPA, said the fall in staff numbers, the rate of staff turnover and the steep fall in entry-level roles “raises real questions about future capability, particularly as AI reshapes skills and ways of working”.
