Charter to Cut $2 Billion In Costs Next Year Under “New Operating Model”

Charter Communications sees the writing on the wall. It reads: “You need to cut costs.”

Charter, which is the home to Spectrum, calls itself “America’s Internet Company” — and for good reason. Charter is the leading internet and video provider in the nation providing services to more than 70 million homes and businesses across 45 states. In August, Charter Communications combined with Communications.

Now, CEO Chris Winfrey is unveiling a major reorganization.

“With the combination of Charter and Cox, we have the scale and network capabilities to connect more Americans than ever before,” Winfrey said in a statement accompanying the company’s third-quarter earnings results.

“Our purpose is Connecting Gigabit America,” Winfrey said. “Today, we are announcing decisive steps to unlock our full potential.”

Winfrey continued, “We are fundamentally rethinking how we operate and compete, with a renewed focus on delivering the best products and services. We will return Charter to Internet customer growth and transform Charter into a simpler, faster, more agile organization — and reignite our culture to win. We have the assets and competitive advantages to succeed and are moving with urgency to deliver more value for our customers and stronger results for our investors.”

To that end, Charter is “targeting $2 billion in annualized run-rate operating expense savings over the next 18 months,” the accompanying press release read, “in addition to more than $1 billion in anticipated Cox Transactions synergies.”

The cost-cutting program “will focus on eliminating nonessential activities, simplifying organizational
structures and driving greater efficiencies through vendor partnerships,” per Charter. “Together, these initiatives are expected to strengthen Charter’s competitive position, drive improved financial performance and support significantly higher free cash flow generation over time.”

If only the actual company earnings offered as much optimism. Charter lost $2.1 billion in Q3; the Charter side lost 156,000 internet customers; Cox lost 77,000.