Viacom Off 1% In After-hours After Announcing Reorganization

Viacom Inc. said Monday it will reorganize three of its domestic network groups into two new organizations, reshuffling sales, marketing, creative and support functions. The move increases efficiencies in program and product development, the company said. In connection with the realignment, Viacom said it will recognize a second-quarter pre-tax charge of about $785 million. "The charge reflects the impact of write-downs of underperforming programming, including the abandonment of select acquired titles, as well as costs associated with workforce reductions," the company said. The initiatives are expected to provide ongoing annual savings of about $350 million, with savings in 2015 expected to be around $175 million. Viacom also said it will temporarily halt share purchases under its current $20 billion stock-buyback program. Shares of Viacom, the owner of Paramount Pictures, MTV Networks and Comedy Central, were down 1.6% in after-hours trading after ending Monday 1.5% higher.