Dentsu cuts jobs in China as it realigns to new structure

Dentsu is making significant changes to its talent pool in China as it moves towards creating a more agile, client-centred organisation under its 'one Dentsu' model. The latest changes involve significant layoffs among staff in mainland China, but will also involve fresh hiring in that market in the new year, Campaign understands.

Sources with knowledge of the organisation's operations in China have told Campaign that affected staff in mainland China have received layoff notices this week. While one such source estimated the number of job cuts could involve as many as 350 positions, or 15% of Dentsu's total headcount in the market, others within the organisation have told Campaign the number is below that estimate.

Dentsu declined to detail the extent of the layoffs, but a Dentsu spokesperson provided the following statement: 

In January, we shared our global vision and blueprint for 'one Dentsu', an integrated global network where our clients benefit from a collaborative community of marketing experts who live and breathe creativity and a culture of client excellence. There has been strong progress over the course of this year, most recently with a new operating model and executive appointments to drive the transition to a client-centric organisation with deep-craft development and innovation at heart.

We’re continuing to strategically evolve our business to remain strong and competitive as we transition to the ‘one Dentsu’ model around the world. This includes continuously evaluating our resources to meet client, workforce and marketplace needs. We're actively hiring skilled talent in several growth areas of our business, while also adjusting staffing levels across a portion of our individual agency operations. We are committed to our clients and our business in China, ensuring the needs of our clients are met with the best access to services and talent.

Campaign understands Dentsu remains committed to its China business, despite its acknowledged challenges in the market before, during and after the pandemic. Just months ago, Dentsu opened its brand new office in Shanghai's Changning District and named a new China CEO, Chun Yin Mak, to replace the exiting Deric Wong. Last month, it also announced a new Greater North Asia cluster to bring Greater China and Korean markets closer together. 

Dentsu is one of many global agencies experiencing business challenges in the mainland China market over the past year. Campaign has heard from several agencies that have struggled with the economic downturn in China and is also gathering other recent reports of agency layoffs, which will be outlined in an upcoming feature article.

Campaign has also learned that as Dentsu recalibrates its talent pool to align with its new strategy, it will be hiring new positions focused on client-facing roles and others focused around building new capabilities and services for the future, which will also include the Chinese market. One estimate suggested that the number rehired in China could be close to half of the number affected by the current layoffs, though any hiring next year will remain linked to performance. 

Minnie Wang contributed reporting to this article.