Dentsu cuts 3,400 jobs globally as international struggles intensify

Japanese advertising giant Dentsu Group announced on August 14, 2025, that it will eliminate approximately 3,400 positions across its international operations, representing 8% of its overseas workforce. The job cuts form part of a comprehensive restructuring initiative as the company posted significant goodwill impairment losses and suspended its interim dividend payments.

According to the company's financial results, "The Japanese advertising company said Thursday that it booked a net loss of 79.9 billion yen, equivalent to $541.9 million, for the three months ended June." The restructuring will primarily affect corporate and back-office functions across Dentsu's global offices outside Japan.

Financial pressures drive workforce reduction

The workforce reduction follows Dentsu's disappointing financial results for the first half of 2025. According to the earnings documents, "H1 25 organic growth was -0.2%, which was slightly below our expectations, due to the continuing challenging conditions in all three regions of our International business, although Japan continued to perform well."

During its latest earnings report, the company acknowledged challenging global conditions. "The company reported a 0.2% year-on-year decline in organic revenue during the first half of 2025. Its Japan region was the only strong performer, generating organic revenue growth of 5.3% during the first half of the year," according to the financial statements.

Hiroshi Igarashi, Dentsu's president and global CEO, stated: "Our Japan business achieved record-high net revenue and underlying operating profit, marking sustained growth for the ninth quarter in a row. However, our international business continues to face negative growth across all regions, resulting in a challenging overall performance."

Substantial impairment losses recorded

The advertising group recorded significant goodwill impairment losses during the second quarter of 2025. According to Dentsu's financial statements, the company "booked Y86 billion of impairment losses on goodwill in the Americas and Europe, the Middle East and Africa regions."

The earnings documentation specifies: "Additionally, mainly due to the underperformance of our International business, we recorded an impairment loss of JPY 86bn on goodwill in the Americas and EMEA." These charges break down as "68.9" billion yen in the Americas and "17.1" billion yen in EMEA.

Divided performance across regions

While Japan maintained strong performance, Dentsu's international operations struggled considerably. The financial results show Japan achieved "organic revenue growth of 5.3% during the first half of the year," while other regions posted negative growth.

According to the earnings call transcript, regional performance varied dramatically: "For the Americas for FY2026, the revenue growth rate used in impairment test is 1%, and for FY2027 onwards, 3%. For EMEA, from FY2026 to FY2029, 2.4%."

The company's segment information reveals that "Japan saw a net revenue organic growth rate of 5.3%" while "The Americas saw a net revenue organic growth rate of negative 3.4%" and "In EMEA, the net revenue organic growth rate was negative 2.4%."

Strategic restructuring targets cost reduction

The restructuring will focus on specific employee categories. According to the earnings documentation, "Positions affected by the restructuring include those involving corporate and back-office functions, as the company looks to streamline its operations without affecting its growth potential or competitive advantage."

The company expects substantial cost savings from these measures. "Identified cost reduction initiatives of JPY 52bn annually compared to the original target," according to the financial results. This represents efforts to "Enhance workforce efficiency through a headcount reduction of approximately 8% (around 3,400 employees) in the International business."

Dividend suspension and financial impact

The company suspended its interim dividend payment and left its year-end dividend forecast undetermined. The earnings documentation states: "In order to prioritize capital enhancement, we regret to announce that the interim dividend is suspended, and the forecast of the year-end dividend is currently undetermined."

According to the financial statements, "Due to the impairment loss of goodwill, Dentsu Group Inc. recorded a loss on valuation of shares of subsidiaries and associates" which "have decreased significantly" the company's retained earnings.

Management accountability and future strategy

Company leadership acknowledged responsibility for the situation requiring these job cuts. CEO Igarashi stated in the earnings call: "In regard to the impairment on this occasion, we, the management, take this seriously. The judgment regarding risk may not have been strict enough."

The company is exploring strategic alternatives beyond the immediate workforce reduction. "We are currently conducting discussions with external advisors who bring specialized expertise in this area. We will consider options to accelerate business restructuring through partnerships with third parties if it will help us achieve an earlier recovery," according to the earnings call transcript.

Implementation timeline and scope

The 3,400 job cuts represent a significant portion of Dentsu's global workforce. According to the earnings documentation, "Dentsu had about 68,000 employees globally as of the end of December" 2024, making this reduction substantial across international operations.

The company specified that restructuring costs will be phased over time. "A portion of JPY 50bn one-time expenses originally planned for FY2025, will be deferred to FY2026 or later, but the effects are expected to be realised as we planned," according to the financial results.

Industry context and broader challenges

The earnings call revealed multiple factors contributing to the need for job cuts. Management cited "ongoing client losses, reduced spending, and macroeconomic uncertainty in its customer experience management and creative sectors" as key challenges facing the international business.

Company executives noted that "AI across various fields is becoming very prevalent. Needs from our clients have become very sophisticated with the advent of AI, and we have been facing the need to address that" during the earnings discussion.

Future outlook and recovery plans

Dentsu outlined its path forward following these workforce reductions. "To achieve fundamental improvements, we aim to expedite the implementation of comprehensive and strategic partnerships for our International business," according to the earnings announcement.

The company maintains ambitious targets despite current challenges. Management stated: "By 2030, we want to make this business one of the main pillars of our business going forward" regarding new growth initiatives, while working to restore international operations to profitability.

Timeline

• February 3, 2025: Teads cuts 15% of workforce after $900 million merger with Outbrain, affecting ~200 employees
• February 2025: Company previously recorded "quite a conservative" impairment outlook with 210 billion yen loss
• March 13, 2025: Bipartisan legislation aims to restructure digital ad market as AMERICA Act targets $700 billion advertising ecosystem
• July 2, 2025: Microsoft cuts 9,000 employees as Xbox division faces major restructuringdespite record gaming engagement
• July 11, 2025: TripleLift cuts double-digit percentage of workforce affecting less than 20% of employee base
• August 7, 2025: WPP cuts workforce by 7,000 employees as financial pressures mount at world's largest advertising company
• August 14, 2025: Dentsu announces Q2 2025 financial results showing 79.9 billion yen quarterly loss and 3,400 job cuts
• August 2025: OpenX files follow-on antitrust lawsuit against Google's ad tech monopoly seeking damages after court victory

PPC Land explains

International Business - Dentsu's operations outside Japan, which encompass the Americas, EMEA, and APAC regions. These markets generated significant losses and negative growth, directly causing the 3,400 job cuts. Unlike Japan's consistent profitability, international operations struggled with client losses, reduced spending, and macroeconomic uncertainty.

Goodwill Impairment - Accounting charges totaling 86 billion yen that recognize when acquired assets are worth less than their recorded book value. These massive write-downs indicate Dentsu overpaid for previous acquisitions or that international businesses performed far below expectations, triggering the need for cost reduction through layoffs.

Organic Growth - Revenue growth excluding acquisitions and currency fluctuations, showing underlying business health. Dentsu's negative 0.2% organic growth in the first half of 2025 demonstrates fundamental operational challenges that necessitated workforce reductions to maintain profitability targets.

Restructuring - The comprehensive reorganization affecting corporate and back-office functions across international markets. This strategic initiative aims to streamline operations while eliminating 3,400 positions to achieve 52 billion yen in annual cost savings without compromising competitive advantages.

Operating Margin - Profitability measurement calculated as underlying operating profit divided by net revenue. Dentsu's target of 16-17% margins by 2027 requires significant cost reduction, with workforce cuts representing a primary mechanism for improving this key financial metric.

Americas Region - Dentsu's largest international market, posting negative 3.4% organic growth and absorbing 68.9 billion yen in goodwill impairment losses. Challenging conditions in the United States and Canada contributed significantly to the decision to eliminate thousands of positions globally.

Japan Business - Dentsu's domestic operations, which achieved record performance with 5.3% organic growth and sustained profitability for nine consecutive quarters. Japan's strength contrasts sharply with international struggles, highlighting why job cuts focused exclusively on overseas operations.

EMEA Region - Europe, Middle East, and Africa operations that declined 2.4% organically and recorded 17.1 billion yen in impairment losses. Challenging markets in the United Kingdom, Netherlands, France, and Denmark necessitated workforce reductions as part of broader cost-cutting measures.

Cost Reduction - The strategic initiative to cut annual operating expenses by 52 billion yen through various measures, including the elimination of 3,400 international positions. These savings are essential for returning international operations to profitability and achieving medium-term financial targets.

Underlying Operating Profit - A key performance indicator measuring recurring business performance after eliminating one-time charges and acquisition-related costs. Despite workforce reductions, Dentsu must improve this metric across international markets to justify continued global operations and prevent further layoffs.

Summary

Who: Dentsu Group Inc., employing approximately 68,000 people globally, will eliminate 3,400 international positions affecting corporate and back-office functions.

What: The company announced an 8% reduction in international staff alongside 86 billion yen goodwill impairment losses and suspension of dividend payments while pursuing strategic partnerships.

When: The announcement was made on August 14, 2025, following second-quarter results showing a 79.9 billion yen net loss for the three months ended June.

Where: Job cuts will affect Dentsu's operations across Americas, EMEA, and APAC regions, specifically targeting headquarters and back-office functions outside Japan.

Why: The workforce reduction responds to continued negative organic growth across all international regions, substantial goodwill impairments, and the need to achieve 52 billion yen in annual cost savings while management acknowledged insufficient risk assessment in past decisions.