MTG to Cut 300 Jobs Across Scandinavia, U.K.

STOCKHOLM: Modern Times Group (MTG) has unveiled a new restructuring program, under which some 300 positions will be eliminated within the company.

The jobs are being cut in Sweden, Norway, Denmark and the U.K. Net restructuring charges are expected to amount to approximately SEK 700 million ($85.5 million) and all be charged against the group’s operating income in Q3 2015 as a non-reoccurring item. Approximately 60 percent of the charges refer to redundancy costs, and 40 percent to impairment charges. The cash flow impact is expected to be approximately SEK 550 million ($67.2 million). The restructuring is expected to generate annualized savings of approximately SEK 600 million ($73.3 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's president and CEO, said: “We started on this journey to transform the Group, in order to drive and shape the fast-moving changes in consumer behavior 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 organizations 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.”