Dentsu chief executive officer Tadashi Ishii announced today that he will resign next month after leading the network for more than five years.
His press conference came less than one day after the Japan Times and other local outlets reported that the country's labor ministry had referred Ishii and the Dentsu organization to federal prosecutors. Officials reportedly recommended filing unspecified charges over the December 2015 suicide of a young Dentsu employee who attributed her own death to a culture of "overwork."
"I feel deep responsibility as a person overseeing management of the company," said Ishii as quoted by the Japan Times. "I will take full responsibility and will step down at a board meeting in January."
UPDATE: Dentsu provided an official statement on Thursday morning several hours after this story originally went live and posted a release on its website.
"Today a case against Dentsu Inc. and one of its employees in Japan has been referred to the prosecutors office for alleged violations of the Labor Standards Act," the statement read. "We take this situation very seriously. We sincerely apologize to all concerned parties for causing this situation. We are now committed to use our utmost efforts to make actual improvements to the working environment and to effectively eradicate long working hours at our company."
Ishii is an industry veteran who appeared on Adweek's Power List of the world's 100 most influential marketers in both 2015 and 2016. Tokyo-based Dentsu, which owns the Dentsu Aegis network and once held a 15 percent stake in Publicis Groupe, is the world's fifth largest holding company by annual revenue. Its agency roster includes such names as mcgarrybowen, Carat, Isobar, Merkle and Posterscope.
The controversy began last December when 24-year-old digital account manager Matsuri Takahashi killed herself after reportedly working more than 100 hours of overtime in a single month and claiming on social media that her bosses were abusive. Last month, the Japanese labor ministry raided several Dentsu offices as part of an ongoing investigation into the overworking phenomenon, commonly called "karoshi" in Japan. Only days before the raids, Dentsu had announced the creation of a "Working Environment Reforms Commission" to address the matter.
The alleged crimes involved the misreporting of overtime hours in violation of prior agreements between the Dentsu organization and Japanese labor unions.
This is not a new phenomenon. In 2000, the company acknowledged fault in the 1991 suicide of another 24-year-old employee and agreed to pay his family between $1 million and $2 million in a settlement.
Nor was Takahashi's suicide the only controversy to hit Dentsu in 2016. Early this year, the PR wing of the organization acknowledged a failure to properly label paid promotions, and in September the network's Japanese performance marketing unit DA Search and Link admitted to "inappropriate operations" related to the alleged over-billing of client Toyota for digital work.
According to the press release, Ishii's successor will be announced at a January Dentsu board meeting. He or she will officially take control of the company when Ishii's term expires at the conclusion of the shareholders' meeting in March.