Dentsu CEO Removed After A$2.85B Impairment Loss
Dentsu Group ousts CEO Hiroshi Igarashi following a ¥310.1 billion goodwill impairment charge, with international operations and Asia Pacific revenue declines signaling deeper structural challenges...
Dentsu Group removed CEO Hiroshi Igarashi effective March 27, 2026, following a ¥310.1 billion (A$2.85 billion) goodwill impairment charge that pushed the advertising giant to a ¥327.6 billion statutory net loss for fiscal year 2025.
The Tokyo-headquartered company promoted Takeshi Sano, currently CEO of Dentsu Japan and deputy global chief operating officer, to replace Igarashi. Sano has been with the company since 1992. Vice president and global chief governance officer Arinobu Soga will also step down following the shareholders' meeting.
Impairment Concentrated in International Operations
The massive write-down reflects significant overvaluation of Dentsu's international acquisitions, with ¥230.8 billion in impairment charges concentrated in the Americas region and ¥79.3 billion in EMEA. The company attributed the charges to higher discount rates applied in light of recent market interest rates and conservative reflection of various risks in overseas operations.
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Dentsu's international business, which generated US$4.5 billion in net revenues in 2024, faced a collapsed sale process after private equity firms including Apollo withdrew in 2025 and Bain Capital declined to proceed. Analysts described the international operations as "difficult to turn around," questioning whether legacy agency scale still holds value.
The company suspended its fiscal year 2025 year-end dividend following the losses, which surged 70.5% year-on-year.
Asia Pacific Revenue Falls Despite Cost Cuts
Asia Pacific operations saw organic growth decline 6.8% for the year ended December 31, 2025, with annual revenue falling 7.9% to ¥107.3 billion (A$990 million). Australia was specifically identified as a "challenging" major market, with the Customer Experience Management business experiencing sustained double-digit declines throughout fiscal year 2024.
The regional weakness contrasts sharply with Dentsu's domestic Japan operations, which achieved 6.2% organic growth in fiscal year 2025, demonstrating the stark performance gap between home and international markets.
Despite revenue declines, Dentsu's "highly disciplined" cost management helped Asia Pacific operating profit surge 159% to ¥2.7 million (A$25.1 million). The company implemented workforce reductions of approximately 3,400 employees (8% of international workforce) announced in August 2025, with 2,100 positions eliminated by year end and remaining cuts expected in 2026.
Fourth quarter 2025 showed modest improvement, with Asia Pacific growth of 0.3% compared to a 3.9% year-on-year decline earlier in the year.
Leadership Change Amid Governance Pressures
The CEO removal comes as activist shareholder Oasis pushes for accountability, with Igarashi facing a potential no-confidence vote at the March annual general meeting. Whistleblower reports at Dentsu increased nearly 50% in 2024, covering harassment and fraud issues.
Dentsu's share price dropped 23% from December 2024 levels, with the stock trading 18% below peaks. The company's revised fiscal year 2025 guidance of approximately 1% organic growth with 12% operating margin represents a dramatic downward revision from prior medium-term targets of four to five percent compound annual growth.
Through restructuring initiatives, Dentsu targets approximately ¥50 billion (A$461.5 million) in cost savings by fiscal year 2027 compared with fiscal year 2025 levels, with ¥14 billion already achieved through headcount reductions.
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