France's CanalPlus to Cut Up to 500 Jobs
The Vivendi-owned pay TV giant faces pressure from international streamers, such as Netflix, promising to "redefine its growth model in order to become a global player" and reach "dynamic and sustainable growth."
Vivendi's French pay TV arm CanalPlus is set to cut nearly 500 jobs, or around 18 percent of its workforce, according to a plan presented to staff Tuesday.
The once-dominant TV unit has been facing pressure from international streamers, including Netflix, which has cut into its movie business. Qatar-based beIN Sports and Spain's Mediapro, which outbid it on soccer rights last year, have put pressure on Vivendi on the sporting events side, which was once a key building block of its business.
In a statement, the group called the cuts part of its “global transformation” plan, which it laid at the feet of the “upheavals in the audiovisual sector and the transformation of its business.” It added: “CanalPlus Group is committed for several years to redefine its growth model in order to become a global player,” promising the move would help it “return to dynamic and sustainable growth.”
The cuts will all involve buyouts as the company seeks to cut additional costs. The company underwent a restructuring last year and has overhauled its offerings with lower-price programs to attract younger subscribers. Still, CanalPlus lost 228,000 subscribers in France, but remained profitable due to growing revenue in overseas territories, including Asia.
“Unfortunately, these achievements are still insufficient as the transformation of our industry is undergoing a revolution with digital native, global platforms, which have considerable financial strength and escape regulatory and fiscal constraints facing the CanalPlus Group," the firm said. Due to historical regulatory obligations, CanalPlus still invests heavily in prebuying and financing French films.
The company hopes the job cuts will allow it to pursue its plan to launch CanalPlus globally to compete with Netflix and other streamers.
The company remains profitable though, with earnings up by $90 million (80 million euros) in the 2018 fiscal year. Parent company Vivendi will release its first-half results July 25.