One of India’s leading media conglomerates, Zee Entertainment Enterprises (Zee) on Friday announced a plan to reduce its workforce by 15% across various departments in a bid to streamline costs and attain a targeted EBITDA margin of 20% by 2025-26. the company revealed it in a Bombay Stock Exchange (BSE) Filing. It was a week ago when Zee laid off 50% workforce at the Technology & Innovation Centre, Bengaluru.

Approximately 700 employees are expected to be affected by this decision, given that the company had a total workforce of 4,577 individuals as of March 31, 2023. In the fiscal year 2022-23, Zee recorded employee benefit expenses amounting to ₹675 crore.

Zee’s Managing Director (MD) and Chief Executive Officer (CEO), Punit Goenka presented a proposal to the Board to implement a streamlined management structure aligned with the company’s strategic objectives. With a strategic vision aimed at achieving predetermined targets, the MD & CEO has set in motion a workforce reduction plan of 15%, intending to refine the company’s team to one that is highly focused on future goals.

Zee’s Other Measures:

Zee has recently witnessed several exits from its top management. After completing two years, in March, Nitin Mittal stepped down from his role as President of Technology and Data at Zee as the company streamlined the vertical.

Previously, Rahul Johri resigned from his position as President of business, South Asia at Zee Entertainment Enterprises Ltd following a three-year tenure. Johri led the integrated revenue and monetization team during his tenure.

Zee is set to restructure its business into four core divisions: Broadcast, Digital, Movies, and Music.

Executives’ Statements

In MD & CEO’s words, “Building a simplified, lateral structure for the Company, will ensure that we maintain a sharp focus on Performance and Profitability as the key growth drivers and the structure proposed to the Board is in line with this core thought.”

“The streamlined team at ZEE will maintain a sharper focus on targeting higher levels of productivity to drive growth to generate value for all our stakeholders going forward. I look forward to the Board’s guidance on this approach, enabling us to pursue our goals more effectively and take advantage of the opportunities before us.” Punit Goenka further stated.

R. Gopalan, Chairman of Zee Entertainment Entreprises said, “The Board has noted the MD & CEO’s steps being taken to streamline the organisation and the proposed lean structure. While the Board is in the process of discussing the same, the proposed structure certainly is in line with the strategic guidance provided to the management. The Board appreciates the steps taken by the management to enhance the overall performance of the company, reaffirming our faith in the team’s ability to drive the Company towards its set targets for the future.”

Zee’s Failed Merger Bid with Sony

In January, Sony Pictures Network, India terminated the proposed $10-billion merger with Zee due to alleged financial terms’ non-compliance by Zee Entertainment Entreprises. Sony Group Corporation (SGC) from Japan initiated arbitration proceedings before the Singapore International Arbitration Centre (SIAC), seeking a termination fee of $90 million (around Rs 748.5 crore).

Zee Entertainment Enterprises stated that it believes Sony Pictures Network’s claims are unfounded and won’t significantly impact the company. These changes in Zee’s management structure are potentially after this failed merger with Sony Pictures Network, India.

Possible Outcomes

The suggested framework aims to establish a cost-efficient operational model, keeping speed and agility as primary focal points. This structure possibly will empower the company to head towards elevated growth levels by prioritizing performance and profitability. As a result, it will facilitate the seamless execution of strategic priorities essential for a content creation company.