Yahoo Finance BCE's Subsidiary Bell Implements Restructuring Measures
BCE Inc’s BCE subsidiary Bell announced significant measures to address the decline in revenues in its legacy phone and news businesses, per a report from Reuters. The company plans to cut 1,300 jobs, close six radio stations, and sell three radio stations. These actions are due to the challenges faced by the media industry, such as reduced advertising revenues, inflation, and the shift from traditional cable TV to streaming services.
The majority of the job cuts will impact management positions, reflecting the broader trend of cost-cutting in the media sector. Bell anticipates an annual decline of $250 million in legacy phone revenues. Additionally, the news operation is experiencing annual operating losses amounting to $40 million, per a report from Reuters.
The Canadian telecom industry has faced pressure from the government to reduce phone bills in the market characterized by limited competition. Furthermore, proposed legislation aimed at compelling Internet giants, like Google and Facebook, to pay news publishers for their content has faced obstacles. As a response, these companies have conducted tests to restrict some users' access to news content, added Reuters.
BCE, Inc. Price and Consensus
BCE, Inc. price-consensus-chart | BCE, Inc. Quote
As part of its restructuring efforts, Bell will close the CTV television network's bureaus in London and Los Angeles, as well as scale back its Washington outpost. This move has drawn heavy criticism due to the loss of experienced journalists, added Reuters.
Overall, these measures reflect Bell's strategy to adapt to the evolving media landscape and address the financial challenges it faces in its legacy phone and news businesses. Bell plans to inform affected employees about the changes this week.
BCE provides wireless service, data communications, telephone and high-speed Internet to small and medium-sized businesses. In the first quarter, Bell Media generated revenues of C$780 million, declining 5.5% year over year. The revenues decreased due to lower subscribers and advertisers.
Prepaid mobile phone and net subscriber activations decreased owing to higher customer churn due to promotional offers on postpaid plans.
BCE currently has a Zacks Rank #3 (Hold). Shares of the company have lost 4.7% in the past year compared with the sub-industry’s decline of 5.1%.
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