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Dentsu has signalled the possibility of selling or entering partnerships across its international agency network, in what could mark one of the most significant restructurings for the Japanese holding company in recent years. The move comes as the group grapples with underperforming operations outside Japan and intensifying pressure to streamline its global footprint. In response to questions from analysts, CEO Hiroshi Igarashi described one measure as a “comprehensive and strategic partnership”. When pressed on whether this might mean selling or merging the international arm, Igarashi clarified that while a divestiture was not on the table for now, all options remained under study. He said the company was “rebuilding our business foundation” and re-evaluating underperforming units, with external advisers exploring possible bold moves, including partnerships, capital infusions, or outsourcing corporate functions. While stressing that “nothing has been decided as yet,” Igarashi assured investors that any decisions would be disclosed promptly once finalised. Experts say that Dentsu’s Japan business, which contributes 42% of its net revenue, continues to perform strongly, recording 5.3% organic growth in the first half of 2025. However, the international arm remains a drag, with Asia-Pacific alone posting a steep 8.9% decline, pulling overall performance down to negative 0.2%. Reports noted that after the shortcomings of its acquisition-led expansion strategy, the company is now pivoting to a renewed framework built around “dreaming big.” The focus will be on strengthening its core markets of Japan and the US, while turning around its underperforming international operations with a sharper emphasis on media. As part of this reset, Dentsu is likely to trim around 8% of its international workforce — roughly 3,400 roles — largely across back-office and headquarters functions, with frontline sales staff expected to remain largely unaffected. Reports also said the group has mapped out initiatives aimed at delivering cost savings of approximately JPY 52 billion (AUD 540 million) by 2027. To accelerate this process, the company has engaged external consultants to explore strategic options for its overseas business, including potential divestitures, partnerships, or further restructuring, the reports added. e4m sent out questionnaires to dentsu Indian and global teams. Their response was awaited till the time of writing this copy. Dentsu’s recalibration arrives at a time of extraordinary upheaval for the advertising sector. IPG and Omnicom are in the midst of executing a historic merger that will create the world’s largest communications group, while WPP is battling slowing growth, client churn and an urgent need to reset its business model to stay competitive in the face of AI-driven disruption and a fragile global economy. “For Dentsu, the possibility of divesting or partnering overseas agencies reflects a broader reality: holding companies can no longer afford bloated structures when clients are demanding efficiency, agility and measurable outcomes. Analysts believe the company may be seeking to shed weaker assets in order to focus resources on high-growth areas such as digital, data and technology, where it still retains significant strengths,” said an executive. If realized, such a restructuring would not only reshape Dentsu’s global positioning but also signal how legacy advertising giants are being forced into rapid reinvention.
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