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Viacom to lay off people and reorganize network groups
Highlights
US media company Viacom Inc said it will undertake a restructuring, including cutting jobs, abandoning some acquired titles and reorganizing three of its domestic network groups into two new organizations, to drive growth. The owner of movie studio Paramount Pictures and cable networks such as MTV and Comedy Central said it will take a related pre-tax charge of about $785 million in the quarter ended March 31.
US media company Viacom Inc said it will undertake a restructuring, including cutting jobs, abandoning some acquired titles and reorganizing three of its domestic network groups into two new organizations, to drive growth. The owner of movie studio Paramount Pictures and cable networks such as MTV and Comedy Central said it will take a related pre-tax charge of about $785 million in the quarter ended March 31.
Viacom also halted its $20 billion share buyback programme due to the restructuring and the spending on acquisitions anticipated in the current fiscal year. The company's shares fell 1.6 per cent after the bell on Monday.
Viacom said the new structure would realign sales, marketing, creative and support functions and increase efficiencies in programme and product development. The company in January reported lower-than-expected first-quarter revenue due to weak advertising spending in the United States.
Viacom said on Monday it "reallocating resources to expand its capabilities in critical business areas" such as data analysis, technology development and consumer insights. The company said it expects to save about $350 million annually, including about $175 million this year, from the restructuring.
Viacom said the stock buyback halt, aimed to keep the company within its target leverage ratio, would last no later than October. Up to Monday's close, shares of the company have slipped about 9 per cent this year.
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