Economic uncertainty is affecting everyone it seems, and Canada’s big telecoms aren’t immune. Yesterday, Bell announced its Q2 earnings and saw its net earnings fall nearly 40% year-over-year.
Bell also noted yesterday it had cut 1,300 jobs from its media division, which resulted in this sharp decline in profits for the quarter. Notably, Bell spent $80 million in severance costs for the quarter, more than double what it spent in the same period last year, pointed out The Star.
The drastic measures come as Bell reported a decline in media revenue and faces various challenges, including a prolonged advertising slump, a shift of advertising revenue to foreign digital platforms, content cost inflation, and a challenging regulatory environment.
Bell’s Chief Financial Officer, Glen LeBlanc, expressed that the media division’s revenue declined by about two percent in the quarter to $805 million. Despite this being better than some competitors, he acknowledged that the business continues to face numerous challenges.
The job cuts, announced in June, were part of Bell’s response to align costs with the revenue it expects to bring in. LeBlanc mentioned that the “very aggressive workforce reduction program” would lead to cost savings later in the year, aiding Bell to meet its financial targets.
Rogers in July said its profit decreased by 73% to $109 million after it closed its deal with Shaw, while nearly 1,200 employees took exit packages as part of the merger.
Today, Telus announced it was also cutting jobs, to the tune of 6,000 globally, while its net income also declined sharply in the second quarter.
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As they should!