German commercial broadcaster ProSieben Sat.1 says it will lay off 400 full-time workers as part of a broader restructuring of its business.
In a statement released on Tuesday, officials at ProSieben Sat.1 said the first round of layoffs will see the broadcaster offer voluntary buyouts before moving on to pink slips.
“The job cuts will be made in a socially responsible manner through a voluntary redundancy program in order to avoid compulsory redundancies as far as possible,” a spokesperson for the German media company said on Tuesday. “The company had agreed to this in talks with employee representatives.”
The first round of buyouts will occur between now and the end of the year, and are expected to incur a charge-off in the low tens of millions of Euros (tens of millions of dollars). Officials said the charge-off was already incorporated in its full-year financial guidance for 2023.
“In a constantly changing media industry, it is only logical that we have realigned our strategy and are constantly questioning our own positioning,” Bert Habets, the CEO of ProSieben Sat.1 Media, said in a statement. “In addition, we have to operate in an extremely challenging economic environment for the fourth year in a row. It is therefore imperative that we significantly reduce our material and personnel costs. The job cuts are a difficult, but a necessary decision, so that ProSieben Sat.1 can increase its earning power and grow sustainably and healthily again.”
The restructuring comes nearly a year after ProSieben Sat.1 acquired Warner Bros Discovery’s 50 percent stake in the streaming joint venture Joyn, which gave it full operational control of the business. Joyn bills itself as the largest free-to-access streaming video platform in the Germanic region; the service has yet to turn a profit, with ProSieben Sat.1 executives projecting a loss of €75-80 million (about $85 to $89 million) during 2022.
ProSieben Sat.1 has experienced lower advertising revenue due to the same macroeconomic conditions that have afflicted other broadcasters in Europe and North America, with the company reporting a 12 percent drop in TV advertising revenue during the first quarter of the year.
Habets remains bullish on Joyn’s future as the cornerstone streaming service of ProSieben Sat.1, and suggested the reorganization of the broader business would soon help turn things around.
“We have a clear plan with a focus on our entertainment offering and especially on Joyn,” Habets said. “This way, we want to become the number one in the German-speaking entertainment market as a company. And we have now created an agile setup as well as headroom for investments again — this was absolutely essential as a basis for implementing our growth strategy.”