CME plans 1,000-person staff cut, looks to shed ‘non-core’ assets

Central European Media Enterprises (CME) has said that it plans to cut 1,000 members of staff by the end of the year and that it is in the process of reviewing its “non-core businesses,” after posting poor Q3 results.

Speaking on the company’s earnings call yesterday, co-CEO Michael Del Nin said that in the last few weeks CME has “accelerated and expanded the company’s previously announced restructuring plans.”

“By the end of this year, we are targeting to have approximately 1,000 fewer employees than we had at the start of 2013,” he said.

Del Nin said this would result in roughly US$30 million (€22 million) in annual savings, but will result in a larger-than-anticipated restructuring charge of US$20 million this year, as well as severance costs of approximately US$7 million in total for the third and fourth quarters.

“Going forward, we plan to focus our energies on building our core TV broadcasting assets in each country. As such, we are in the process of reviewing alternatives for some of our non-core businesses, such as theatrical and home video distribution, including potential divestitures of some or all of these assets,” said Del Nin.

He added that the company would be better served by a “sharper management focus on its core businesses.”

The news comes after CME posted  a Q3 operating loss of US$45.0 million. Operating income before depreciation and amortisation (OIBDA), a measure of the profitability of ongoing business activities, came in at a loss of US$32.4 million – results that Del Nin described as “unacceptable.”

Del Nin and co-CEO Christoph Mainusch took over at CME following the departure of former CEO Adrian Sarbu in August.