Charter Communications is overhauling its business after the company shed 233,000 Internet customers and 77,000 video customers during its third quarter.
On Friday, the cable giant said it was targeting $2 billion in cost savings over the next 18 months, on top of an additional $1 billion expected from its recently closed merger with Cox, as part of a “fundamental redesign.” The cuts are focused on “eliminating nonessential activities, simplifying organizational structures and driving greater efficiencies through vendor partnerships,” the company said.
“We’re fundamentally rethinking how we compete, how we allocate resources, and how we run our business. This represents a significant change, and with greater urgency and sharper focus, we will transform our ability to compete in the market with growing customer expectations for service delivery, experience, and value,” Charter CEO Chris Winfrey told analysts during the company’s third quarter earnings call on Friday on Friday. “Going forward, we’ll maintain a relentless focus on two clear priorities: doubling down on our returning our company to growth, and secondly, transforming Charter into a simpler, more efficient organization.”
Winfrey said the company’s top priority would be returning to growth in its core Internet business by winning more customers through a shift in its go-to-market approach. The company had 34.3 million Internet customers as of the end of September.
As for its cost savings, the majority will come from eliminating projects that don’t contribute to internet growth and reorganizing its leadership and teams. As part of this move, Spectrum Chief Commercial Officer Adam Ray and Chief Marketing Officer Sharon Peters are exiting the company at the end of the year. Winfrey emphasized that the cuts are not targeted at frontline services and sales employees.
“Our frontline employees will benefit from simpler offerings, faster responsiveness to the market, and continued technology deployment, where we already use AI, allowing our team members to serve happier customers more effectively and reducing unnecessary service transactions,” Winfrey said. “We’ll continue to drive higher quality and lower service transactions, higher job satisfaction, and will reduce hiring needs as a result, all while moving Cox service calls from offshore to our 100% U.S. employee base without increasing headcount. We’re building a winning culture, raising our competitive metabolism with faster execution and a stronger sense of urgency across the company.”
Overall, Charter reported revenue of $14.9 billion, an increase of 9.1% year-over year, primarily driven by the Cox merger. It also swung to a loss of $2.4 billion, or $20.50 a share, driven in part by a $6.3 billion franchise impairment charge.
The merger with Cox added over 5 million customer relationships, making Charter the nation’s leading Internet and video provider. It also expanded the company’s presence in high-growth markets, including Phoenix and Las Vegas, and complementary markets across the country.
Charter shares fell 3% on Friday following the results.
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The post Charter Communications Eyes $2 Billion in Cost Savings in ‘Fundamental Redesign’ of Business appeared first on TheWrap.
