Zee Entertainment Considers Layoffs Following Sony Merger Termination

14 Feb 2024 , 12:45 PM

Zee Entertainment considers layoffs to cut employee costs and enhance profitability. Sony terminated the planned $10 billion merger with Zee, signed over two years ago, prompting cost-cutting measures. CEO Punit Goenka mentions potential layoffs as part of the plan for frugality but emphasizes the need for assessments to determine overlaps.

Zee proposed various conditions to Sony to address merger-related demands, but these were not accepted. After Sony’s merger termination, Zee approached the National Company Law Tribunal (NCLT) seeking direction on scheme implementation.

Zee revisits plans as a standalone company, focusing on performance improvement; Q3FY24 reports a 140% profit increase at ₹ 58.5 Crore.Q3FY24 sees a 12.8% decline in operating costs due to lower content costs and continuous cost optimization in Zee5. Despite effective cost management, EBITDA margins declined to 10.2% due to merger-related expenses.

CFO Rohit Gupta outlines targets for 8 to 10% overall revenue CAGR and aims to return to an 18 to 20% EBITDA margin profile in a stable macro environment. Recent subdued performance is attributed to temporary factors, prompting a focus on cost control through revisiting with frugality and fiscal prudence.

ZEEL, formerly Zee Telefilms, is an Indian media conglomerate headquartered in Mumbai. The company has diverse interests in television, print, internet, film, mobile content, and operates 45 channels globally.

Japanese multinational conglomerate, Sony Group Corporation, headquartered in Minato, Tokyo, Japan. Formerly known as Tokyo Tsushin Kogyo K.K. and Sony Corporation. Entities under Sony Group include Sony Corporation, Sony Semiconductor Solutions, Sony Entertainment, Sony Interactive Entertainment, Sony Financial Group, and others.

Established in 1946 as Tokyo Tsushin Kogyo by Masaru Ibuka and Akio Morita. Sony has diverse business ventures, including the introduction of the PlayStation home video game console. Sony transformed into a holding company in 2021, with the subsidiary electronics company adopting the name Sony Corporation.

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