Dentsu plans to cut overseas workforce by about 3,400 to trim costs
The reduction, focused on headquarters and back-office functions in markets outside of Japan, are designed to streamline operations without affecting the company's growth potential or competitiveness, the company said in a statement Thursday after market close.
The move comes as the company reports an operating loss of ¥62 billion ($424 million) for the quarter ended June, after booking an ¥86 billion impairment loss due to sluggish performance in the U.S. and Europe.
Dentsu now expects to incur an operating loss of ¥3.5 billion this year, compared with a previous forecast of ¥66 billion in operating profit.
The company is also mulling options for its overseas operations, including forming partnerships.
The advertising agency said it's making "steady progress' to achieve an operating margin on 16% to 17% in fiscal 2027 and is expected to deliver approximately ¥52 billion in annual operating cost cuts, exceeding the target, it said.
Dentsu's stock has declined 17% this year as of Thursday, while the benchmark Topix index has risen 9.8%.
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