MONTREAL — Canuck cabler Shaw Communications is axing 400 jobs after reporting second-quarter losses of C$74.4 million ($47 million) Tuesday.
The Calgary-based company had strong growth in revenue and cash flow in the quarter that ended Feb. 28, but major increases in borrowing costs pushed it into the red.
The result was a huge drop on the same quarter last year, when the cabler posted profit of $119 million. Shaw has lost $80 million in six months, compared with earnings of $98 million for the same period the previous year.
Revenue increased to $298 million for the second quarter, up from $226 million a year earlier, and revenue for the six months surged to $581 million, compared with $444 million for the first six months last year.
Shaw execs said they were committed to cutting capital expenditures, which is why they made the layoffs. Severance packages will cost $2.9 million.
In addition, Shaw will sell its U.S. cable system to focus on Western Canada. The proceeds from the sale will pay down debt.
Starting May 1, Shaw will increase its prices for bundled cable packages by $1.89 per month, affecting almost all of Shaw’s cable subscribers. In February, Star Choice, Shaw’s DTH service, had 726,000 subscribers, a net gain of 52,000 subscribers during the quarter.