Media giant Viacom is taking a big fat charge in the first quarter and axing a bunch of jobs as part of a restructuring plan announced on Monday.
Viacom will take a $US785 million pre-tax charge in the first quarter as a part of a “strategic realignment” that will “increase efficiencies” in its sales, marketing, creative, and support functions.
In a release, Viacom said:
“The charge reflects the impact of write-downs of underperforming programming, including the abandonment of select acquired titles, as well as costs associated with workforce reductions. The charge also reflects accelerated amortization of programming expenses associated with a change in the Company’s ultimate revenue projections for certain original programming genres that have been impacted by changing media consumption habits.”
The company expects this plan to save $US175 million in 2015 and $US350 million per year going forward. The company did not say how many jobs it expects to eliminate as part of the plan.
Viacom also announced that it will temporarily suspend its $US20 billion share repurchase plan, but expects to resume purchases by October.
Viacom has a market cap of around $US28 billion and operates media brands including MTV, VH1, Nickelodeon, Comedy Central, and BET. Shares of the company were down about 0.9% in after hours trading on Monday.