Bell Canada Enterprises (BCE) had to pay more than 230 million in severance pay during its first quarter of fiscal 2024, more than during its entire 2023 fiscal year, following its workforce reduction announced this winter .
Canada’s largest communications company said Thursday that its severance costs reached $234 million in the first quarter. For comparison, these costs were 29 million for the same period a year earlier, and 134 million for the entire 2023 financial year.
In February, BCE announced the elimination of 4,800 jobs, or 9% of its workforce, including journalists and other workers at its subsidiary Bell Media, as part of its “largest workforce restructuring initiative in almost 30 years.
Once this restructuring is completed, BCE expects that the personnel reductions will allow savings of 150 to 200 million per year in 2024. Ultimately, the severance payments linked to this operation could amount to approximately 400 million.
To justify these cuts to its workforce, the company cited increasingly unfavorable federal government policies and regulatory decisions, an economy marked by high interest rates and persistent inflation, as well as as the intensification of competition.
According to the company, the increase in costs related to severance pay also had an impact on its profits in the first quarter, which fell 42% from one year to the next.
The company reported net profit of 457 million for its quarter ended March 31, down 42.0% from the 788 million reported for the same period last year.
The company’s revenues were also down, falling from $6.054 billion in the first quarter of 2023 to $6.011 billion a year later.
In a press release, BCE President and CEO Mirko Bibic was still pleased to see that earnings before interest, taxes, depreciation and amortization (EBITDA) increased by 1.1% in one year, reaching 2.565 billion in the most recent quarter.
In his opinion, the results released Thursday “are a reflection of the Bell team’s continued ability to navigate an environment of increased competition.”
At Bell Communications and Technology Services, revenues reached $5.375 billion, up 0.1%. Among other things, Bell added 31,078 net new subscribers to its internet services, up 13.9% year over year, its best result in this regard in a quarter since 2007.
For its part, Bell Media saw its revenues decrease by 7.1% year over year, to $725 million, due to a drop in subscription revenues.
Its advertising revenue increased 1.6% thanks to the broadcast of Super Bowl LVIII and demand for digital, radio and outdoor billboard advertising.
This increase was offset by weak advertiser demand in the traditional television sector, which the company attributes to unfavorable economic conditions and the postponement of certain scripted content in the wake of the Hollywood writers’ strike which took place last year.
reference: www.lapresse.ca