WWE CEO & Chairman Vince McMahon told employees during a brief video call on Wednesday that the company would be making cuts due to the ongoing COVID-19 pandemic.
Following the call, WWE issued a press release explaining how the company has been affected and what cost reductions and cuts they would be making. The various cuts and furloughs along with reductions would help save the company $4 million per month and giving it $140 million in improved cash flow, primarily by delaying the move to its new Connecticut headquarters that was originally set to take place in early 2021.
The call was followed by a press release that was issued outlining the ways in which the company has been affected by the COVID-19 pandemic and the cuts they will be making.
The cuts, furloughs, and other actions being taken will provide the company with $4 million in savings per month, achieving a $140 million in improved cash flow primarily by delaying its move to its new headquarters, originally targeted for early 2021.
Here is the release from the company:
WWE (NYSE: WWE) today provided an update on measures taken by the Company in response to the current impact of COVID-19 on the organization.
Due to COVID-19 and current government mandated impacts on WWE and the media business generally, the Company went through an extensive evaluation of its operations over the past several weeks. This analysis resulted in the implementation of various short-term cost reductions and cash flow improvement actions including:
*Reducing executive and board member compensation;
*Decreasing operating expenses;
*Cutting talent expenses, third party staffing and consulting;
*Deferring spend on the build out of the Company’s new headquarters for at least six months.
Given the uncertainty of the situation, the Company also identified headcount reductions and made the decision to furlough a portion of its workforce effective immediately. The decision to furlough versus permanently reduce headcount reflects the fact that the Company currently believes the furlough will be temporary in nature.
The Company’s reductions of employee compensation and headcount result in an estimated monthly savings of $4 million along with cash flow improvement of $140 million primarily from the deferral in spending on the Company’s new headquarters. Additionally, the Company has substantial financial resources, both available cash and debt capacity, which currently total approximately $0.5 billion, to manage the challenges ahead. Management continues to believe the fundamentals of the Company’s business remain strong and that WWE is well positioned to take full advantage of the changing media landscape and increasing value of live sports rights over the longer term.
The Company will provide further details when it reports its first quarter 2020 results next Thursday, April 23 after the close of the market.