Firm plans to slash quarter of its workforce by next month amid financial struggles
Corus Entertainment Inc. expects to cut 25 percent of its full-time workforce by the end of next month compared with the start of its 2023 fiscal year, aiming to “aggressively cut costs.”
According to BNN Bloomberg, these job losses, around 800 positions, come during a challenging year for the Toronto-based television and radio broadcaster, marked by advertising revenue declines, regulatory challenges, and licensing battles.
On Monday, Corus reported a loss attributable to shareholders of $769.9m in its latest quarter, compared with a loss of $495.1m a year earlier, as its revenue fell 16 percent. Revenue for the company’s third quarter totaled $331.8m, down from $397.3m a year earlier.
Television revenue dropped 17 percent to $308.2m from $371.2m last year, while radio revenue slipped 9.9 percent to $23.6m from $26.2m a year earlier.
“We’re making tough decisions to shutter areas of the business we can no longer sustain and pause longer-term development activities while we implement efficiency initiatives,” said co-chief executive John Gossling during a conference call with analysts.
“Our plan is to emerge as a smaller but more profitable business with a sustainable future.”
Corus attributes the advertising slump to lingering effects from the 2023 Hollywood strikes that delayed production of key programming, along with inflationary and competitive challenges.
In May, Canada’s broadcasting regulator granted Corus’s request to ease some of its Canadian content spending requirements, warning of an increasingly dire financial situation.
The CRTC noted the risk of Corus exiting the Canadian broadcasting landscape “would greatly reduce the options Canadian viewers have for content.”
Last month, Corus lost rights to key brands like HGTV, Food Network, Cooking Channel, Magnolia Network, and OWN, due to Rogers Communications Inc. signing a multi-year deal with Warner Bros. Discovery for its popular lifestyle and entertainment brands in Canada starting Jan. 1.
Rogers is also set to take over the Canadian programming rights from Bell Media for channels such as Discovery Channel Canada, Discovery Velocity, Discovery Science, and Animal Planet.
Corus announced Doug Murphy's retirement from the top job and the appointment of Gossling and Troy Reeb as co-CEOs. Reeb said Corus will continue providing home and culinary content under new television channel brands after the Warner Bros. deal with Rogers.
He mentioned the company is exploring “all legal and regulatory remedies” in response to that agreement, stating, “Our intent is to do what we need to do to protect our business.”
Gossling declined to offer further details on their strategy, suggesting they might not rely solely on the regulator for defence.
Corus's third-quarter loss amounted to $3.86 per diluted share for the quarter ended May 31, compared with a loss of $2.48 per diluted share in the same quarter last year. On an adjusted basis, Corus lost 10 cents per share in the quarter, compared with an adjusted profit of nine cents per share a year earlier.
Shares in Corus fell four cents, or 20 percent, to 16 cents on Monday morning.
RBC analyst Drew McReynolds noted that “given the still challenged operating environment,” shares in Corus are expected to remain “under pressure.”
As part of Corus’s cost-reduction plan, Reeb said the company’s news branch “will continue to drive industry-leading efficiency efforts,” while utilizing digital technology to create local content.
He emphasized the need to “redouble our efforts to reduce legacy costs, not just in news, but in all areas of the business.” Reeb acknowledged Corus’s strong brand legacy but noted this does not necessitate maintaining legacy cost structures.
