Days after the merger with Sony collapsed on January 22, 2024, Punit Goenka had addressed Zee employees promising no layoffs due the failure of the merger. This week, in an earnings call, Goenka, MD and CEO of Zee Entertainment Enterprises, said there are likely to be some layoffs in Zee Entertainment as the company is looking to rationalise costs of employees to improve profitability.
On January 22, Sony had terminated a merger with Zee, after two years of intense negotiations to build a $10 billion combined entity.
“Tightening our belt on manpower will be part of the plan going forward as we talk about frugality,” said Zee CEO Punit Goenka during the Q3 FY24 earnings call.
“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.
Goenka also added that several proposals and conditions were proposed to Sony to address their demands but unfortunately, they remain unaccepted.
“Going forward, there will be a sharper emphasis on frugality, with a crystal-clear focus on quality and output,” Goenka said in the earnings call. Zee, still reeling from the dramatic collapse of its merger with Sony and the on-going dispute, plans to cut costs, reduce overlaps and enhance quality to regain margins.
Goenka added, “Across verticals – including technology, content and marketing – we are implementing steps to optimise spends and enhance the return on investments. A sound recalibration of the OTT cost structure will be an integral part of this process.”
For the December quarter of FY24, ZEEL clocked a 140 percent surge in profits at Rs 58.5 crore, against Rs 24.32 crore in the corresponding period of the previous year.
“The company’s proposed merger was terminated by Sony through a communication received on January 22, 2024. The same was reviewed by our Board and appropriate steps have been taken into consideration with the legal experts that are in the best interest of our shareholders and stakeholders. We have even approached the National Company Law Tribunal (NCLT) to seek direction on the implementation of the scheme,” the CEO said.
Zee is now revisiting plans as a standalone company and is focusing on enhancing its performance in the coming quarters.
“No layoffs” speech
Days after the merger collapsed in January, Goenka, MD and CEO of Zee Entertainment Enterprises, spoke to Zee employees following the termination of the $10 billion merger with Sony. Starting the speech with ‘Jai Shree Ram,’ Goenka emphasized the need for the team to move forward.
“It is time to move on as a team, more importantly as a family. The intrinsic value and fundamentals of Zee remain unmatched,” he said. Goenka urged employees to remain laser focused on the business.
“At ZEE, we never believe in looking behind,” he said. Goenka also assured there would be no layoffs due to the failed merger, and increments and bonuses would be performance-based. “We are an asset that a lot of global brands keep looking at,” Goenka said. He added,” The merger has taken away a lot of capital but we are still a cash positive company and we have significant cash reserves,” he added.
Read More: ZEE-Sony merger fallout: Punit Goenka plans to optimise spends, reduce business overlaps