Viaplay Announces Layoffs, New Strategic Plan

Viaplay Group is letting go 25 percent of its workforce as it shifts course, setting a new strategy to focus on its Nordic, Dutch and Viaplay Select operations and mulling a potential sale.

The news came as the company reported a Q2 net loss of SEK 5.9 billion ($571.8 million) on revenues of SEK 4.6 billion ($446 million). The group has set new financial targets for the year, expecting revenues of SEK 18.5 billion to SEK 18.8 billion and subs of between 7 million and 7.2 million.

Jørgen Madsen Lindemann, president and CEO, noted: “We are today announcing a new strategy and plan, which includes, but is not limited to, focusing on our core Nordic, Netherlands and Viaplay Select operations; implementing a new operational model; downsizing, partnering or exiting our other international markets; rightsizing and pricing our product offering in the Nordics; undertaking a major cost reduction program; and conducting an immediate strategic review of the entire business to consider all options including content sublicensing, asset disposals, equity injections or the sale of the whole group.”

Madsen Lindemann said that streamer’s content investments “are not all paying off,” and noted that “the pursuit of subscriber volume growth has been at the cost of value, especially when it comes to our partner agreements. The weakness in the advertising markets and currency exchange rates are additional factors that we must live with. The international expansion assumptions, including the timelines to profitability, have also been pushed materially into the future since the expansion started. We are moving quickly to address all of these challenges.”

The new strategy includes reemphasizing its core Nordic markets, developing “the right content mix” and strengthening “our soon to be profitable Dutch operations, and on the sale of our content internationally through Viaplay Select,” Madsen Lindemann explained. “We are focusing our attention and resources on those markets where we can compete for the long term, and ensuring that our products are relevant, popular and generate healthy returns.”

The group is shedding 25 percent of its workforce and writing down the value of content “where we are not seeing sufficient return on investment.” Viaplay is also withdrawing from the Baltic territories and discontinuing its “low-tier non-sports offering in each of its international markets, “in order to focus on our sports offering and the sale of non-sports content through our profitable Viaplay Select business.”

Madsen Lindemann added: “The future payment commitments for our content, when combined with the revenue trajectory that we see, means that we will need to reach agreement with our lenders on how best to navigate the period ahead. We are addressing covenant and funding challenges through discussions with lenders while exploring capital raising alternatives.”