TOKYO -- The head of Dentsu, Japan's largest advertising agency, on Wednesday evening said he will step down amid growing pressure from authorities over the company's labor practices.
The same day, the labor ministry transferred documents on the company and one of its managers to prosecutors, on suspicion that illegally long hours contributed to the suicide of a young employee a year ago.
Dentsu President Tadashi Ishii offered apologies to the employee's family at the beginning of his news conference, where he announced that he "will resign as the president at January's board meeting."
"I will take all responsibility," Ishii said. He conceded that the company's culture of long hours had not improved, even though labor authorities had repeatedly advised changes.
Ishii did not say who might succeed him. He also intends to resign as a board member in March.
It was Ishii's first news conference since the family of 24-year-old Matsuri Takahashi went public about her suicide in October. The president said he wanted to apologize to the family first, which he did on Dec. 25, the anniversary of Takahashi's death.
Ishii explained that Dentsu is "extremely conscious about professionalism," demands "120% achievement" from its employees and generally insists they accept all offers of business. The problem, he said, was that "everything was excessive."
The president pledged that management would put employees' well-being at the top of its priority list.
As for the potential impact on Dentsu's business, Ishii denied that the company has lost clients due to the scrutiny.
"At this point, there have been no significant reductions in our businesses," he said, though he added, "We will definitely see increased human resources costs starting next year."
Dentsu has said it will reform its working culture under a specially assigned executive, beginning in January.
At the news conference, Senior Executive Vice President Shoichi Nakamoto said the company's culture "brought the prosperity" it enjoys today. But he said he realizes this "has also hurt employees' health."
Dentsu now faces the daunting task of changing a deeply ingrained mindset that helped it become a powerful corporate force.