Media companies plan huge layoffs
Dec 8, 2008 9:11 AM
Viacom, controlled by Sumner M. Redstone, will freeze salaries for its top managers.
More than 1300 employees at NBC Universal and Viacom lost their jobs last week as the nation’s economic woes deepened. NBCU laid off 500 workers — including several longtime correspondents at NBC News — while Viacom axed 850, nearly 7 percent of its entire workforce.
The cuts at NBC represent about 3 percent of its employees. “We have no choice but to respond quickly to the external economic forces that are affecting the entire world economy,” said Jeffrey A. Zucker, CEO of NBC Universal.
At NBC News, the cuts included Mark Mullen, who served as the Beijing bureau chief during the Summer Olympics; John Larson, the West Coast correspondent for “Dateline NBC;” Heather Allan, a veteran of 30 years with NBC; and the Dallas-based correspondent Don Teague. Cuts are expected to continue this week. At CNBC, several dozen positions have already been eliminated.
At NBC’s Universal Pictures, executives said last week that employees are being reduced by about 3 percent. The studios will also be “scaling back on travel, overtime, consultants, premieres, conferences, newspaper marketing and general administrative costs.”
Viacom, controlled by Sumner M. Redstone, also said it would freeze salaries for its top managers. The cuts are intended to save $200 million to $250 million in 2009.
Most employees who are losing their jobs at Viacom, which includes MTV, VH1, BET Networks and Paramount Studios, were notified last week and will be paid for the rest of the year before severance payments begin. Viacom said it would take a pretax charge of about $450 million to its fourth-quarter earnings.
Last month, Viacom reported that its third-quarter profit fell 37 percent as film studio Paramount Pictures’ theatrical revenue fell more than one-third and global ad revenue declined 2 percent. The company was also hindered by lackluster ratings at MTV.
In a research note about Viacom published last week, Michael Nathanson, an analyst at Sanford C. Bernstein, wrote, “The near-term advertising environment is fraught with risk in this weak macroeconomic environment and [Viacom] has repeatedly proven in the past six months that it has relatively little visibility into near-term advertising trends.”
The cuts at Viacom and NBC Universal are part of a swirl of cost reductions occurring across the media industry — including TV stations, newspapers and magazines. It reflects not only the current economic downturn but also more fundamental shifts as advertising flows from traditional media to the Internet.| Want to use this article? Click here for options! |  |
