By BRIAN DOWLING,
[email protected]
1 Aug, 2014
World Wrestling Entertainment Inc. will cut 7 percent of its workforce as part of a push to increase profitability, the company announced Thursday, the same day investors cheered quarterly results that exceeded expectations.
The job reductions would affect roughly 53 of the 762 positions the company said it had in February.
The wrestling entertainment producer is struggling to attract viewers to its online streaming service meant to stem revenues declines from pay-per-view sources. The WWE Network ended the quarter with 700,000 subscribers, an addition of 33,000 for the three months ending June 30.
WWE said in May it needs at least 1.3 million subscribers to replace the lower traditional revenues, and aims to hit the one million mark by the end of the year.
The company reported Thursday a net loss of $14.5 million, or $0.19 per share, compared to net income of $5.2 million, or $0.07 per share, in the same period last year. On an adjusted basis the loss was $13.5 million, or $0.18 per share. That result came in 3 cents better than the 21-cent loss analysts expected.
Shares of WWE stock traded sharply higher when the New York Stock Exchange opened Thursday. The stock price fell slightly through the day, settling at more than 3 percent higher in the afternoon.
In a statement, WWE Chairman and Chief Executive Office Vince McMahon said the business' core metrics are strong, and its streaming WWE Network "continues to be the single greatest opportunity to transform WWE's business model."
"Additionally, we identified efficiencies that will improve our 2015 [operating profit] outlook by $30 million. Based on these initiatives, we are optimistic about our potential to drive long-term growth," McMahon said.
The staffing cuts, along with other efficiencies, are expected to improve WWE's operating income before depreciation and amortization by $30 million in 2015. The decision to make the cuts followed a "comprehensive evaluation" of the company's operation's and are expected to reduce costs across its business units, the company said.
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