Dentsu is stepping up its restructuring efforts across its global operations, targeting a roughly 30% reduction in Global Headquarters costs by FY2028 as the advertising group seeks to restore profitability, simplify its operating model and build a stronger foundation for growth.
The company outlined the measures in an updated Mid-Term Management Plan presented on August 14 by Takeshi Sano, President and Global CEO of dentsu. The revised plan covers FY2026 to FY2028 and retains the central priorities of its earlier strategy: rebuilding profitability, improving financial soundness, investing selectively in growth areas and simplifying the organisation.
Importantly, the 30% figure refers to Global HQ costs, not a 30% cut in overseas units. Dentsu separately plans to reduce the number of international entities by around 70 to 80 in FY2026, with a further reduction of approximately 50 to 80 entities under consideration by FY2028.
More than JPY 50 billion in cost cuts
Dentsu now expects to deliver more than JPY 50 billion in operating cost reductions by FY2027, exceeding the JPY 35-50 billion cost-reduction target outlined in its earlier mid-term plan.
The company says the number of international entities has already been cut by half between January 2021 and January 2026, falling from more than 1,000. It also points to structural transformation already under way, including the partial divestment of its ANZ CXM business.
The restructuring comes as Dentsu continues to grapple with uneven performance across international markets. While China and Australia achieved profitability on an underlying operating profit basis in FY2025, the company expects macroeconomic uncertainty to leave some markets loss-making in FY2026.
Its stated goal is to have no markets operating at a loss by FY2027, followed by all four regions contributing to shareholder value creation in FY2028. Dentsu says it will assess restructuring and exit costs for unprofitable markets and prioritise reforms regardless of the amount of capital already invested.
Japan remains the core, Americas the growth engine
The updated plan gives each of Dentsu’s four regions a distinct role.
Japan remains the group’s “Core”, reflecting its position as Dentsu’s largest profit base. The company plans to expand beyond marketing and communications into business transformation and technology, while also pursuing growth among SMEs and in sports and entertainment.
The Americas have been designated the “Growth Engine”. Dentsu says its Media pipeline remains insufficiently robust, while competition for major pitches is putting pressure on both revenue growth and margins. The company plans to strengthen consultative selling, expand capabilities in areas such as commerce and social, and scale an AI transformation business anchored in CXM.
EMEA, meanwhile, has been classified as a “Turnaround Focus”. Dentsu plans to consolidate operations, streamline delivery and concentrate investment on priority markets. The company says it faces declining market share across key markets, margin pressure from fragmented delivery and intense competition for major pitches.
APAC is positioned as the “Next Growth Base”. Here, Dentsu plans to strengthen its data, social and commerce capabilities, increase investment in high-growth markets and rationalise the business portfolio to create capacity for growth investments.
Read: Dentsu India’s Harsha Razdan on why agencies must stop selling media and start solving problems
AI moves from investment theme to operating model
The restructuring is also closely tied to Dentsu’s push to become an AI-enabled organisation.
The company says it invested JPY 3.7 billion internally in Media, AI, and Data & Technology in the first half of 2026. Going forward, it plans to integrate these investments into its businesses from FY2027 and allocate part of the savings generated from Global HQ reductions towards AI and Data & Technology.
Dentsu’s strategy is built around an AI-and-data model spanning client AI enablement, proprietary data and AI products, and AI-enabled operations. The plan includes adopting agentic workflows, embedding AI into operating models, automating content activation and applying AI to planning and decision-making.
The company also intends to deepen partnerships with technology companies through an open ecosystem, including joint pilots, co-created solutions and interoperable platforms.
Despite the restructuring, Dentsu is not retreating from Media. Instead, it is positioning Media as the core of its global growth architecture.
The company says the international Media business delivered positive organic growth for two consecutive years and remained positive in H1 2026. Japan, meanwhile, recorded positive organic growth for 13 consecutive quarters, while its US CXM business is expected to return to positive growth in FY2026.
The updated strategy calls for investment in growth to remain centred on Media, while Dentsu expands proprietary offerings, develops new revenue models and connects Media with Creative, CXM, business transformation, data and technology.
16% operating margin target by FY2028
Dentsu has set an operating margin target of 16% for FY2028, alongside an organic growth target of 2-3%.
The plan calls for more than JPY 50 billion in operating cost reductions by FY2027, a roughly 30% reduction in Global HQ costs by FY2028 compared with its FY2026 plan, and the elimination of loss-making markets under its defined criteria by FY2027.
The company also says it wants to return to balanced capital allocation, with balance-sheet improvement and cash-flow management taking priority in the near term. At the same time, it plans to prioritise investments in AI, Data & Technology and structural transformation while maintaining a selective and disciplined approach to M&A. Dentsu says it will implement available measures to resume dividends at the earliest possible timeline.
The message from the updated plan is therefore less about a blanket retrenchment across Dentsu’s international operations and more about a targeted restructuring of its global cost base and portfolio. The company is reducing organisational complexity, exiting or restructuring underperforming operations and concentrating repetitive advantage
Its stated destination for 2028 is a simpler, more productive organisation built around Media, AI and technology, with the four regions contributing to shareholder value and Dentsu positioning itself as a broader “Growth Partner” to clients.
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First Published on August 17, 2026, 05:31:02 IST
