Dentsu Inc. will lay off about 11% of its employees in seven markets under a restructuring of its underperforming international businesses.
The restructuring will see workforce reductions in Australia, Brazil, China, France, Germany, Singapore and the U.K. The Japanese advertising company also simplified the structure of its overseas operations into three business lines: Creative, customer relationship management and media.
The restructuring plan was accompanied by earnings forecast revisions for the fiscal year ending Dec. 31. Dentsu revised its net profit outlook to ¥6.2 billion, down 82.7% from the ¥35.8 billion announced in August. It also slashed its basic EPS estimate to ¥22 from ¥127. The company cited the underperformance of several of its overseas operations as the reason for the forecast changes.
The restructuring plan is expected to cost about ¥24.8 billion, of which ¥19.8 billion will be booked in the fiscal year ending December 2019 and the remainder to be recognized in the fiscal year ending December 2020.
More than ¥13.8 billion yen in staff-related costs are expected to be saved on an annual basis, the company said.
As of Dec. 16, US$1 was equivalent to ¥109.67.