After the fallout of the merger deal with Sony, Zee Entertainment Managing Director Punit Goenka, at an investors' call hinted at layoffs saying the company is planning to put in place a 'frugal approach' for an 18 to 20% EBITDA margin with 8-10% CAGR revenue growth.
He added that this would include, "cutting spends, reducing the number of new content properties, and a complete re-evaluation of the firm's sports portfolio".
“Over the last three decades, Zee has been recognised for its fiscal prudence across the industry, and going forward, there will be a sharper emphasis on frugality, with a crystal-clear focus on quality and output,” Goenka said
Goenka while talking abut the frugal approach mentioned that this would include controlling the manpower.
"Tightening our belt on manpower will be part of the plan going forward as we talk about frugality," Goenka said. "I am not saying that there's going to be large levels of layoffs, but we will have to see which are the overlaps," he added.
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Further, Goenka's plans include recalibration of cost structure for businesses like OTT or the implementation of content and tech strategies to drive revenues along with curtailing certain outputs of the firm to improve the revenues and margins.
The company reported a 140% increase in profit at Rs 58.5 crore in the December quarter of FY24 up from Rs 24.32 crore during the same period a year ago.
Meanwhile Zee's Chief Financial Officer Rohit Gupta mentioned that the overall operating costs decline last quarter and the EBITDA declined to 10.2% despite the firm's effective cost management
"In Q3FY24, overall operating costs declined by 12.8 percent quarter-on-quarter (QoQ) due to lower content costs, fewer movie releases and continuous cost optimization in Zee5. Given our business has high operating leverage, despite effective cost management, EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) margins has declined to 10.2 percent. Net profit for the quarter and year was impacted by merger expenses related exceptional items which came to about Rs 60.3 crore during the quarter," said Chief Financial Officer Rohit Gupta.