Japanese advertising agency Dentsu will lay off 11 per cent of its employees in seven markets, including Singapore.
This decision comes as the company slashed its earnings forecast for the year, due to the ongoing under-performance of some markets over the recent quarters, it said.
The company added that it has planned a number of strategic initiatives and restructuring to accelerate the implementation of a new business model and deliver improvements and efficiencies to its business and clients.
These measures will also affect its markets in Australia, Brazil, China, France, Germany and the United Kingdom. It will result in an 11 per cent reduction in headcount alongside property rationalisation and other related impacts.
This figure is reported to translate to about 1,400 jobs across the seven markets, or about 3 per cent of the total headcount of the international business.
Dentsu Singapore hires over 80 employees, according to its website. The firm declined to comment when contacted yesterday.
The move is expected to save more than 13.8 billion yen (S$170.9 million) of headcount-related costs annually. But the company will incur an estimated total cost of 24.8 billion yen over the next two years.
"We remain committed to these markets to enable their long-term success, but must ensure they are structured appropriately to drive operating margin improvements, deliver revenue growth, and achieve a better service for our clients and experience for our people," said Dentsu's statement on Monday.
The firm downgraded its earnings outlook for the year, slashing its net profit from a projected 35.8 billion yen in August to 6.2 billion yen.
How much the move is expected to save the company in headcount-related costs annually.
Dentsu's earnings outlook for the year, slashed from a projected $443 million in August.
This is the latest round of job cuts in Singapore amid the slowing economy this year. Last week, Maybank Kim Eng laid off 5 per cent of its workforce here as the brokerage sector faces stiffer competition because of financial technology. Earlier this year, layoffs also hit workers at Japanese bank MUFG and travel retailer DFS Group.
A report by the Manpower Ministry last week noted that the 2,430 retrenchments between July and September was slightly higher than the previous quarter's figure of 2,320, but fewer than the 2,860 in the same period last year.
The top reason cited for retrenchments was business restructuring and reorganisation, the report said.
BETTER STRATEGY NEEDED
We remain committed to these markets to enable their long-term success, but must ensure they are structured appropriately to drive operating margin improvements, deliver revenue growth, and achieve a better service for our clients and experience for our people.
A STATEMENT FROM DENTSU
Professor Lawrence Loh of the National University of Singapore Business School said: "Advertising and media firms, in particular, face a challenging future - employees all the more will have to upgrade to stay relevant in the workforce."
Maybank Kim Eng senior economist Chua Hak Bin said: "Firms already facing disruption are being pushed to the edge by the economic downturn." However, analysts are still expecting employment growth next year, driven largely by services and construction, he added.