Dentsu has posted a record net loss of ¥327.6 billion (US$2.18 billion) for FY2025, leading to major leadership changes, a suspension of dividends and further job reductions across its international operations.
The loss was mainly due to an additional ¥310.1 billion goodwill impairment recorded in the fourth quarter, largely linked to its overseas business. Management described the move as a conservative reassessment of the group’s medium-term growth outlook.
Following the write-down, Dentsu’s goodwill stood at ¥320.1 billion at year-end, down from ¥697.1 billion the previous year.
Despite the headline loss, the company’s core operations remained stable. Dentsu achieved an operating margin of 14.4%, exceeding its earlier guidance of around 13%, supported by cost controls and efficiency improvements.
Leadership Change
President and Global CEO Hiroshi Igarashi will step down, with Takeshi Sano, currently head of dentsu Japan, taking over from March 27.
Sano plans to introduce a flatter and faster decision-making structure, with regional leaders reporting directly to him. The aim is to improve responsiveness, simplify operations and strengthen oversight across markets.
More Job Cuts Planned
As part of a ¥52 billion restructuring programme, Dentsu has already cut 2,100 jobs in FY2025 and plans to eliminate a further 1,300 roles in 2026, mainly in its international business.
The company is also consolidating subsidiaries, simplifying headquarters functions and increasing automation. Since 2021, Dentsu has reduced its international entities from over 1,000 to about half that number in a broader effort to streamline operations.
Dividend Suspended
For the first time in its history, Dentsu will suspend its year-end dividend and has indicated that no dividend will be paid for FY2026. Management said the decision, while regrettable, is necessary to strengthen the balance sheet and maintain financial flexibility.
Revenue growth remains modest. The group recorded 0.5% growth in 2025 and expects organic growth of between 0% and 1% in 2026. Its international business is projected to remain flat, while Japan continues to perform strongly.
Japan Outperforms, Overseas Markets Lag
Dentsu’s Japan business delivered 6.2% organic growth in 2025, achieving record net revenue and operating profit for the fifth consecutive year. In contrast, several overseas markets reported flat or negative growth.
However, cost-cutting measures helped some previously underperforming markets, such as Australia, return to operating profitability.
Industry-Wide Pressures
Dentsu’s restructuring reflects broader challenges facing global advertising holding companies. Clients are increasingly demanding leaner, technology-driven solutions, while artificial intelligence is reshaping creative, media and data services.
As brands shift more spending in-house or to specialised digital firms, large agency networks are under pressure to simplify structures and sharpen their value propositions.
Incoming CEO Sano said the next phase of transformation will focus on speed, transparency and closer alignment with client needs, as Dentsu works to rebuild competitiveness and restore investor confidence.
