• by Richard Whitman , Columnist, December 7, 2020

Dentsu said today its international operation — including agencies like Carat, Vizeum and mcgarrybowen — would shed 12.5% of its workforce, or about 6,000 jobs as a result of an ongoing reorganization first announced in August. 

The company confirmed the cuts in a release updating its 2020 performance, as well as its ongoing business transformation plans, although the company added that further detail on those plans would be forthcoming in February. 

Last month the firm indicated that as part of the international restructuring, 160 different brands would be consolidated to six “global leadership brands.” That transition will take place over two years. 

Today, the firm estimated the international restructuring costs would total £640 million (about $856 million). About two-thirds of that cost will be recognized in 2020 and the remaining third next year. 

The company also said a “wider transformation program” was being planned for its domestic operations in Japan, following an early retirement program launched in the third quarter. It said costs and savings related to those plans, still being developed, will be disclosed in February. The company has about 66,000 total employees. About 18,000 are based in Japan. 

Last May, the company withdrew its earnings forecast for the year given the uncertainties related to the pandemic. Today it confirmed its 2020 organic revenue decline will be close to 12.5%. 

The company said it is calculating quarter-by-quarter impairment charges for the 2020, noting the pandemic has had “an unprecedented impact on our revenues in FY2020” and continues to create “uncertainty in the operating environment.” 

The restructuring is designed to “simplify” company operations, reduce costs and return to growth.