Viacom to Take $785 Million Restructuring Charge

NEW YORK: Viacom has outlined details of its strategic realignment, intended to create efficiencies and drive long-term growth, resulting in a pre-tax charge of $785 million in its fiscal second quarter.

Viacom is reorganizing three of its U.S. network groups into two new organizations. The new structure realigns sales, marketing, creative and support functions, and is meant to increase efficiencies in program and product development, enhance opportunities to share expertise, and promote greater cross-marketing and cross-channel programming activity.

In connection with the realignment, Viacom will recognize a pre-tax charge in the second fiscal quarter of 2015 of approximately $785 million. The charge reflects the impact of "write-downs of underperforming programming," as well as costs associated with layoffs.

These efforts are expected to create ongoing annual savings of around $350 million; the savings in fiscal 2015 are expected to be around $175 million.

Philippe Dauman, the president and CEO of Viacom, said, “Viacom has a powerful combination of world-class brands and popular content that is driving our business across the globe. We will continue to lead the way in connecting our vibrant brands to audiences through both traditional and innovative new platforms. This strategic realignment, which is largely completed, will allow us to sharpen our focus on driving long-term growth in a rapidly changing industry. We will transition rapidly into the future, generate substantial cost savings and continue to increase our investment in original programming to bring our audiences great content in new and groundbreaking ways.”