MTG restructuring axes 300 staff
August 24, 2015
MTG is launching a restructuring programme to drive the Group’s ongoing digital transformation, fuel investments in the Group’s existing businesses, and to enable the Group to continue to generate profitable growth, it says.
The new structure will realign a wide range of functions, increase efficiency levels across the business, yield savings to offset the significant adverse currency effects that the Group faces and enable reinvestment in the Group’s core business and continued digital expansion.
This will result in a proposed reduction of MTG’s employee base by a net of approximately 300 positions in Sweden, Norway, Denmark, and UK combined.
With write downs on content and other assets, net restructuring charges are expected to amount to approximately SEK 700 million and all be charged against the Group’s operating income in Q3 2015 as a non-recurring 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 annualized 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.
Jørgen Madsen Lindemann, MTG President and CEO commented: “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. 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. The decisions and actions that we are taking are difficult because valued colleagues will leave the group, but they are necessary and we are doing all that we can to assist those affected by these changes.”