Dentsu Group Inc. said Tuesday that about 5,000 employees at its headquarters in Tokyo will telework starting Wednesday after an employee was confirmed to have the COVID-19 coronavirus Monday.

According to the Japanese advertising agency, the employee is in his 50s, and is hospitalized, but not in serious condition,

Four employees suspected of having had close contact with him began to telework on Tuesday, it said.

Dentsu will also decline the entry of visitors to the headquarters building from Wednesday.

On Wednesday morning, Dentsu's shares slid for a sixth day to seven year lows in morning trading, with the spread of the coronavirus raising worries that the Olympic Games in Tokyo will be cancelled and bring pain for Japan's largest ad agency.
The virus epidemic has roiled global markets as investors worry about its economic impact. Japan's benchmark index was down 1% with Dentsu down 2% - extending its fall to 21% year-to-date.

Dentsu is deeply involved in the planning and operation of the upcoming games and had been anticipating a big boost to its earnings as Japan Inc ramps up advertising spending ahead of the once-in-a-generation event.

Officials have denied the Olympics will be postponed or cancelled. But Tokyo has been forced to postpone training for volunteers, with large scale events such as the Tokyo Marathon halted altogether.

Dentsu plunged to an annual operating loss in the year ended December - the first in its more than 100 year history - hammered by poor performance at its Asia business and underscoring its dependence on the domestic market and its plump margins.
"The only saving grace for Dentsu was the Olympics. The industry is going through a seismic shift and can Dentsu pull it off?" said Amir Anvarzadeh, market strategist at Asymmetric Advisors.

Dentsu dominates both media buying and advertising in Japan but has been slow to embrace the shift to digital advertising and is struggling to extend its reach overseas following the 2013 acquisition of Aegis Group.

The ad agency pulled in record domestic sponsorship revenue of more than $3 billion for the 2020 games and has secured key contracts for milestones like the upcoming torch relay and opening and closing ceremonies.

The coronavirus threat to the games was underlined when Dentsu announced an employee at its Tokyo headquarters has been diagnosed with the virus.

Meanwhile, cosmetics maker Shiseido Co.  will have about 8,000 employees, or about 30 percent of its workforce in Japan, work from their homes from Wednesday until March 6.

No coronavirus infection has been confirmed among Shiseido workers.

Those who will telework include executives such as the president, while factory workers and beauty shop sales clerks will go to their workplaces as usual.

JIJI Press/Reuters