Modern Times Group is to lay off 300 staff in Sweden, Norway, Denmark and the UK as part of a restructuring programme. The Group hopes that the move will increase efficiency levels across the business, yield savings to offset the significant adverse currency effects that MTG faces and enable reinvestment in its core business and continued digital expansion.
Jørgen Madsen Lindemann (pictured), MTG president and CEO commented that, “The decisions and actions that we are taking are difficult because valued colleagues will leave the group,” but conceded the move is “necessary”.
Net restructuring charges are expected to amount to approximately SEK 700 million and all be charged against MTG’s operating income in Q3 2015 as a non-reoccurring item. Approximately 60 per cent of the charges refer to redundancy costs, and 40 per cent to impairment charges. The cash flow impact is expected to be approximately SEK 550 million. The restructuring is expected to generate annualised savings of approximately SEK 600 million, of which the majority will be reinvested back into the Group’s ongoing transformation into a broad based video entertainment company. The majority of the savings will impact in 2016 and have full effect from 2017.
“We started on this journey to transform the Group, in order to drive and shape the fast moving changes in consumer behaviour and the video entertainment environment,” said Lindemann. “We want to be able to continue to invest in our successful existing operations and exciting new businesses, in order to secure our future profitable growth, and that requires accelerated changes in our current structure. Today’s announcement follows the management changes we made in May, and local leadership teams are now adjusting their organisations accordingly.”
MTG’s operations span six continents and include TV channels and platforms, online services, content production businesses and radio stations.