Media Kobo is scrapping the "new framework" it built to improve digital content production, cutting outsourced work across its fortune-telling and data businesses and leaving some natural attrition unfilled. The company expects ¥43.8 million of explicit savings in the current year, or about ¥46 million when those unfilled roles are included, and says it does not plan voluntary retirements or layoffs of permanent employees.
Where the cuts land
The biggest named cuts are ¥23 million from ending outsourced contracts in the data and technology segment, ¥12 million from halting new-framework development in the fortune-telling business, ¥8 million from ending other outsourced contracts in that segment, and about ¥0.8 million of rent savings after the transfer of a simulation-golf business. Management describes AI as a support tool for replacing some outsourced work and pushing more production in-house, rather than as a separately quantified growth driver.
Why this became necessary
This is an expensive admission that the earlier plan was not working. Media Kobo expects to book about ¥87 million of impairment losses in its third-quarter results, split between ¥44 million tied to the shelved framework and ¥42 million tied to a data-technology service whose growth has trailed the original plan. The company said the framework took longer than expected to develop and move into live use, then failed to deliver the hoped-for lift in profitability.
The clean-up follows a weak first half. Revenue fell 13.5% to ¥828 million, operating loss widened to ¥309 million from ¥72 million a year earlier, and net loss reached ¥268 million. In the core fortune-telling segment, revenue fell 14.6% and operating profit dropped 39.2% as delayed content launches held back refreshes of new and existing offerings, while consultation volumes missed plan after the departure of popular fortune tellers and shifts in user behaviour linked to the spread of AI fortune-telling services.
Reset first, recovery later
That is why the company cut its full-year forecast even as it announced the savings plan. Media Kobo now expects revenue of ¥1.65 billion, down from the previous ¥2.163 billion forecast, with operating loss widening to ¥495 million from ¥294 million and net loss to ¥587 million from ¥302 million. It also cited higher shareholder benefit and administration costs after adding an interim perk, advisory fees tied to financial strategy and investor relations, and a one-off ¥18 million headquarters move expense, although it said ¥43 million of compensation has been booked as special profit and a ¥4 million gain from transferring a LoungeRange store is expected in the third quarter.
The attached restructuring materials point to a more ambitious next step, about ¥18.57 million of monthly cost reductions and roughly ¥220 million of annual savings in the year to August 2027, while also noting new monthly costs of around ¥1.5 million to ¥2 million. Management says the broader aim is to push more work in-house, concentrate on hit-driven content and spend more on services that rely on human interaction rather than easy automation. But the main filing also says the company's medium-term plan is under review. For now, this looks like a serious cost reset, not a proven turnaround.