Viacom to cut jobs, abandon titles, reorganize network groups
U.S. media company Viacom Inc (VIAB.O) 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 program due to the restructuring and the spending on acquisitions anticipated in the current fiscal year.
The company's shares fell 1.6 percent after the bell on Monday.
Viacom said the new structure would realign sales, marketing, creative and support functions and increase efficiencies in program and product development.
The company in January reported lower-than-expected first-quarter revenue due to weak advertising spending in the United States.
Analysts on average were expecting the company to post a profit of $428.3 million on revenue of $3.26 billion in the second quarter, according to Thomson Reuters I/B/E/S.
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 percent this year.