British advertising group WPP has announced it plans to spend £300 million (€331 million) and cut 2,500 jobs over the next three years to return the world's biggest advertising group to growth by reducing the number of agencies it runs and hiring more talent in New York.

The owner of the JWT and Ogilvy agencies has lost 40% of its value in the last year and has been forced to cut its sales and profit forecasts after it lost some major clients and others cut their spending.

It set out its plan to respond today, three months after company veteran Mark Read replaced founder Martin Sorrell at the head of the business.

It is targeting a return to organic net sales growth in line with its peers by 2021.

The company, which has it executive office in Dublin, said it would maintain and prioritise its dividend over buybacks and deals.

It added that full-year organic net sales were likely to be down by 0.5% this year, an improvement on the 1% drop it predicted in October.

WPP said it would invest in its New York creative agencies and achieve savings of £275 million a year by 2021 by merging offices, closing others and exiting some businesses.

It will lose around 3,500 jobs in areas of duplication, and hire a further 1,000 to boost its technology and creative credentials.