Nielsen Holdings plc announced a broad-based optimization plan to drive permanent cost savings and operational efficiencies, as well as to position the Company for greater profitability and growth. Nielsen is prioritizing resources to focus on key strategic initiatives, higher margin products and services, and greater efficiency. As part of the plan, the Company will exit several smaller, underperforming markets and non-core businesses in the second half of 2020. Nielsen expects the plan to be substantially completed in 2020 and for restructuring actions and other permanent cost-saving initiatives to drive approximately $250 million in pre-tax annual run-rate savings.
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David Kenny, Chief Executive Officer, commented, “Across Nielsen Global Media and Nielsen Global Connect, we are making progress on increasing our operational and financial discipline, including zero-basing our cost structure as we move toward the planned separation of Nielsen Global Connect. As discussed on our earnings call in April, we have increased our focus on platform consolidations, further automation, optimizing our global footprint, and ensuring that our resource allocation aligns with high-margin essential services. Today’s plan encompasses, accelerates, and expands on those initiatives. These restructuring actions will further expedite our transformation to a more efficient, agile, and scalable organization and are designed to drive sustained margin expansion and increased cash generation. As part of the optimization plan, we have made the difficult decision to exit selected businesses and markets and permanently reduce our workforce. While these are important actions to take, I recognize the impact they have on our people, and I am grateful for the important contributions made by these talented associates during their time at Nielsen.”
Nielsen now expects 2020 pre-tax restructuring charges of $150 to $170 million versus guidance of $120 to $140 million provided in April 2020. Approximately half of these charges were incurred in the second quarter and are mostly employee severance costs. The optimization plan includes a global reduction in force of approximately 3,500 employees. Cash payments for the severance costs will continue into late 2021.
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