Dentsu Aegis Network has announced it will cut 11 per cent of its total headcount across seven markets – including Australia – as a result of “ongoing underperformance”.
The Japanese holding company made the announcement yesterday, revealing the 11 per cent job cut would apply to Australia, Brazil, China, France, Germany, Singapore and the UK , resulting in a three per cent reduction to the company’s total headcount.
The cuts represent 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,” DAN said.
These “large, complex and challenged markets” have underperformed over recent quarters, causing the company to revise the latest forecast of financial results for the year ending 31 December 2019.
The forecast net profit dropped from $475.6m to $82.37m, according to the release.
“Within the international business, there are a small number of large, complex and challenged markets that have reported ongoing underperformance over recent quarters,” the company said.
“In order to future-proof the business, a number of planned strategic initiatives are being introduced in these markets to enable us to deliver sustainable growth in FY2020 and beyond.
“This restructuring will accelerate the implementation of the new business model and deliver improvements and efficiencies for our business and our clients.”
The move comes just three weeks after Dentsu Aegis Network ANZ announced regional CEO Henry Tajer and CFO Reg Davidson were departing the company, to be replaced by Angela Tangas and Jerome Whelan respectively.
It was reported DAN had lost $300 million worth of client spend in Australia over the last 12 months, including David Jones, Australia Post, The Good Guys, Virgin Australia, Bega, Asahi, Super Retail Group, and the AFL.