Advertising giant Dentsu Inc. will set up an independent committee to oversee working environment reforms in the wake of public uproar sparked by the death of a young employee who committed suicide due to overwork.
The independent committee, announced Tuesday, will comprise a former labor ministry official and two lawyers who will meet each month to examine reforms due to be compiled by company executives by April.
The group will report to board members once every six months on the progress being made and the effectiveness of the new measures, the company said. The committee will be launched Feb. 28.
“We will achieve the working environment reform in two years,” President Toshihiro Yamamoto said in his first news conference since taking the helm in January.
The company has been forced to limit office hours since the 2015 suicide of one of its new employees was determined to be karoshi (death from overwork) last September.
The company also announced its earnings outlook on Tuesday. In its unconsolidated outlook through December, Dentsu said it now expects its profit to drop 31.4 percent from the previous year to ¥63.1 billion ($551 million) due to mounting costs incurred as a result of limiting workloads, hiring additional workers and having to computerize some tasks.
“We will not pursue work volumes beyond our limit,” Yamamoto said, “This is the essential process for growth.”
The company is projecting operating profit to decline 8.2 percent to ¥59.4 billion on revenue of ¥1.57 trillion, down 1.6 percent.
Yamamoto said the unconsolidated earnings may fall even further if some local governments decide to slap their own punitive measures on the company for violating the Labor Standards Law, such as by preventing it from bidding for their contracts.
For the full year that ended in December, the company reported a group net profit of ¥83.5 billion, up 0.5 percent from the previous year due to its overseas operations.
Its operating profit for the period stood at ¥137.7 billion, up 7.4 percent, on revenue of ¥838.4 billion, up 2.4 percent.
The company also expects the consolidated revenue to increase for the current business year.
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