Dentsu has today announced it will be restructuring its operations into four operating pillars after deciding to consolidate its brand agencies into six global brands. The new plans will come into effect in February 2021.
Announcing the move, Toshihiro Yamamoto, president and chief executive officer at Dentsu Group, said: “We simply have too many brands almost, 300 across both Japan and internationally.
“This radical new structure will be more logical and transparent for our clients, enabling us to serve them better.”
It’s hoped the new efficiencies will allow the holding company to “reduce costs significantly”.
Dentsu has had its balance sheet battered by COVID. Back in August it announced its Q2 profits were down a a staggering 39.2 per cent YOY, with it’s Aussie operations weighing heavy on Tokyo’s bottom line.
However, the agency’s problems aguably set in well before COVID.
Back in December it announced it would cut 11 per cent of its total headcount across seven markets – including Australia – as a result of “ongoing underperformance”.
The cuts represented a saving of almost $200m annually (£100m).
“We remain committed to these markets to enable their long-term success but must ensure they are structured appropriately to drive operating margin improvements, deliver revenue growth and achieve a better service for our clients and experience for our people,” a Dentus spokesperson said at the time.
“Within the international business, there are a small number of large, complex and challenged markets that have reported ongoing underperformance over recent quarters,” the spokesperson added.
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