WPP PROFITS JUMP 57% BUT $400M MARS ACCOUNT LOSS PROMPTS BATES LAYOFFS

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LONDON-As WPP Group announced a 57% jump in 1994 pretax profits last week and forecast a record 1995, Saatchi & Saatchi Co.'s Bates Worldwide network started layoffs in the wake of the Mars account loss.

Bates Canada fired eight of 133 employees, and more layoffs are expected around the world.

"You can't lose $400 million in business without losing people," said Malcolm Cullen, Bates Canada president. "In Japan, Mars was 50% of the business."

WPP's healthy financial performance, including a pretax profit of $134.8 million, will make Saatchi look even paler when it unveils its own 1994 results March 14.

"WPP is moving in the right direction .*.*. it's also got costs under control," said Mark Beilby, an S.G. Warburg analyst.

Goldman Sachs analyst Guy Lamming was more cautious: "WPP is doing well, but it's nothing to get excited about."

WPP's 8% margins fall short of the 12% to 14% reported by competitors Interpublic Group of Cos. and Omnicom Group. WPP 1994 revenue remained unchanged at $2.2 billion.

Saatchi & Saatchi Co. is expected to report pretax profits this month of about $45 million for 1994. Last month's loss of the Mars account has already prompted analysts to slash pretax profit forecasts for 1995 by $15 million to $45 million. WPP's profits are expected to rise above $150 million this year.

Joanne Ingrassia contributed to this story.

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