Dentsu Aegis posts full-year loss as UK job cuts begin

Campaign reported in December that about 9% of group's estimated 4,000 UK staff 'may be impacted'.

Dentsu Aegis: UK headquarters in Regent's Place
Dentsu Aegis: UK headquarters in Regent's Place

Dentsu Aegis Network has posted a full-year loss of ¥80.89bn (£568m) for 2019 – results that were "adversely affected by underperformance" in Australia, Brazil, China, France and the UK.

Japanese ad giant Dentsu's international division delivered a decline in organic growth of 1.9%. Taking out the underperforming markets, the international business delivered 2.5% organic growth.

The full-year consolidated financial results referred to Dentsu Aegis' plan to carry out a restructure across Australia, Brazil, China, France and the UK, as revealed in December 2019.

Industry sources say the UK management team has begun informing staff this week about the planned job cuts and warning those at risk. Under UK law, any redundancies of more than 100 jobs will require a 45-day consultation period.

Campaign reported in December that about 9% of the group’s estimated 4,000 staff in the UK "may be impacted" in a restructuring, according to Dentsu Aegis. This will be a mixture of some job losses and some roles being relocated to other parts of the UK.

The financial results also reported a fall in organic growth of 0.7% in EMEA for 2019. Dentsu Aegis added: "The overall regional performance deteriorated in the fourth quarter, impacted by continued challenges in the UK and France."

Toshihiro Yamamoto, president and chief executive of Dentsu, said: "The international business suffered from a continuing weak performance in a number of key markets, leading to the decision to announce a restructuring in December.

"I am confident the restructuring of the International business will deliver the necessary savings and changes to our organisational structure that we need to deliver growth and margin improvement in 2020 and beyond.

"2020 is an exciting year for our business. In January, Dentsu transitioned to a new group structure, bringing the Japan and the international business closer together under the shared understanding of 'One Dentsu'. This structure will create a solid foundation to allow our people to work across markets and across brands, to deliver growth for our clients."