Media ratings firm Nielsen said Tuesday it will exit several smaller, underperforming markets and non-core businesses in the second half of this year to cut costs and improve operational efficiency.
Nielsen has been restructuring as it moves toward splitting into two independent, publicly-traded companies. It is also seeking to boost a share price that has fallen by 38% over the past year.
“As discussed on our earnings call in April, we have increased our focus on platform consolidations, further automation, optimizing our global footprint, and ensuring that our resource allocation aligns with high-margin essential services,” Chief Executive David Kenny said Tuesday in a news release. “Today’s plan encompasses, accelerates, and expands on those initiatives.”
“These restructuring actions will further expedite our transformation to a more efficient, agile, and scalable organization and are designed to drive sustained margin expansion and increased cash generation,” he added.
The company said the streamlining moves are part of “broad-based optimization plan” that will reduce its global workforce by about 3,500 employees and generate about $250 million in pretax annual run-rate savings.
“As part of the optimization plan, we have made the difficult decision to exit selected businesses and markets and permanently reduce our workforce,” Kenny said.
Nielsen now expects 2020 pre-tax restructuring charges of $150 to $170 million versus the guidance of $120 to $140 million provided in April, reflecting the costs of the market and business exits.
“The impact of these exits is expected to be no more than 100 basis points to 2020 revenue growth, with an immaterial impact on 2020 adjusted EBITDA,” it said.
The planned split would create one company, Nielsen Global Media, focused on providing measurement metrics to media and advertising clients and another company, Nielsen Global Connect, that will offer data and analytics to manufacturers and retailers.
In trading Tuesday, Nielsen shares dropped 2.5% to $14.66.
cost cutting, David Kenny, media ratings, Nielsen, restructuring
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Nielsen to Exit Businesses, Cut 3500 Jobs - CFO Magazine
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