Dentsu dials back international sale plans, to slash 8% of workforce

Dentsu is pressing ahead with a sweeping overhaul of its international business, signalling a shift away from potential large scale divestments in favour of internal restructuring to restore profitability across its Americas, EMEA and APAC operations.

In an update on the progress of its international business restructuring, the Japanese advertising group said it remains on track to hit an operating margin of 16% by FY2027, driven by cost reduction initiatives expected to deliver savings of approximately US$327 million compared to its initial FY2025 forecast.

Rather than pursuing an outright sale of its international operations, Dentsu appears focused on tightening its cost base and simplifying its structure. Central to this plan is a workforce reduction of about 8%, equivalent to roughly 3,400 roles across its international markets. As of FY2025, measures affecting around 2,100 employees have already been completed, with the remaining reductions expected to be finalised within FY2026.

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The group also revised down its previously announced restructuring costs for FY2025. While Dentsu had initially guided for around US$176 million in costs as of August 2025, it ultimately recorded US$114 million following refinements to execution timing and accounting recognition. This adjustment reflects what the company described as steady progress across its initiatives and a more measured rollout of changes.

Beyond headcount reductions, Dentsu incurred additional structural reform costs in the fourth quarter of FY2025, largely tied to real estate optimisation and other operational efficiencies within its international business. Taken together, total consolidated restructuring costs for the full year amounted to US$216 million.

The update underscores Dentsu’s intention to stabilise and strengthen its international operations internally, at a time when global holding companies continue to face margin pressure and slower growth in key markets. By prioritising cost discipline and operational streamlining, the group is positioning itself to improve performance without resorting to major asset sales.

The restructuring programme forms part of a broader push under the global leadership to sharpen Dentsu’s focus and rebuild profitability outside its home market of Japan. If successful, the strategy could mark a turning point for the group’s international business as it works towards its FY2027 margin target.

This comes following Dentsu appointed Takeshi Sano as global CEO as part of its latest restructuring, with his new role effective on 27 March, replacing Hiroshi Igarashi. 

Igarashi, who is stepping down as global CEO, departs after more than 40 years at Dentsu. He held a range of leadership roles spanning account management, group strategy, and governance before becoming global CEO in 2022. 

The network said in a statement, the changes are intended to “strengthen competitiveness by accelerating transformation under the new management structure.” The appointments will be formalised at the board meeting following the 177th ordinary general meeting of shareholders.

Back in August last year, Dentsu had announced it was exploring the sale of its international business. The move came as the group evaluated strategic options, with potential buyers, including industry players and private equity firms, are already being approached.

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