The group, which owns Hill & Knowlton, Cohn & Wolfe and Buchanan Communications, is said to be concentrating on cutting back in areas where staff costs exceed 60 per cent of revenue.
WPP operations in Western Europe and North America are expected to be most affected.
The decision was apparently reached after budgetary meetings between chief executive Sir Martin Sorrell and various division heads through November and December.
But The Observer newspaper quotes one source as dismissing speculation that 10 per cent of its workforce will be cut as ‘rubbish'.
WPP currently employs 100,000 world-wide and the report suggests it may be looking to grow headcounts in developing economies in South America, Eastern Europe and Asia where demand for PR and market research continues to grow.
WPP is not the only communications giant looking to trim back. Before Christmas it emerged that Omnicom (owner of Porter Novelli and Gavin Anderson) and Interpublic (owner of Weber Shandwick) are to cut their workforces by around 5 per cent.