Zee to reduce workforce by 15% to cut costs

ZEE Entertainment Enterprises announced that it has commenced a workforce reduction initiative, aiming to trim 15 percent of employees company wide. In a regulatory filing, the company disclosed that its Managing Director and CEO Punit Goenka has recommended a leaner and more streamlined management structure to the board, featuring a lateral structure. The company aims to reduce costs and achieve the targeted objectives of 8-10% revenue growth and 18-20% Ebitda margins by FY26. Additionally, core business units have been identified as entertainment, digital, movies, and music.

"In line with his overall strategic approach, the MD & CEO has initiated the process of rationalisation of the workforce by 15 per cent, that will prune the staff strength across the company to arrive at a streamlined team that is sharply focused on the set goals for the future," the statement said.

Approximately 500 employees out of the total permanent staff of 3,437 are anticipated to be impacted by the layoffs. This announcement follows shortly after Goenka's voluntary decision to reduce his pay by 20%.

The proposed structure is aimed towards arriving at a cost-effective operational model with speed and agility as the core areas of focus. It will further enable the Company to chart higher growth by maintaining a keen eye on performance and profitability, thereby seamlessly executing its strategic priorities as required for a content creation company.

Within the lateral structure, Goenka has suggested promoting select team members across various business sectors to grant them greater responsibilities. Additionally, he will personally oversee crucial business verticals, fostering cross-functional collaboration, swift decision-making, and heightened productivity levels.

Following Sony's withdrawal from the proposed $10-billion merger with Zee in January, Goenka outlined a three-part strategy in February. This strategy aims at cost reduction, minimising business overlaps, and elevating content quality. The statement mentions that going forward, the Company will continue to follow this approach, “focusing on frugality, optimization and a sharp focus on quality content”.

“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 in order 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,” Goenka stated.

In order to further strengthen the content creation capabilities, the lateral structure will focus on a more collaborative environment across the core business segments to leverage synergies in terms of creativity, technology and revenue generating opportunities. The core business units of the proposed structure will include: broadcast business, digital, movie studio, and music vertical. 

R. Gopalan, Chairman of ZEE, 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.”

Over the past month, several senior executives have quit Zee, including Rahul Johri, president of business; Punit Misra, president of content and international markets; and Nitin Mittal, president and group chief technology officer.