Viacom’s Cable Nets Aren’t Recession-Proof
December 4, 2008 10:35 AM
As the heads of the U.S.’ carmakers are begging again at the Fed window for a “bridge loan,” Scrooge arrived at Viacom, announcing that the company was laying off 7% of its workforce, eliminating 850 jobs.
On top of that, Viacom, parent company of MTV Networks, is suspending senior-level managers’ raises for next year and is looking to write down certain programming assets that the company would not identify.
Although Viacom was the first cable programming company to announce large layoffs, it won’t be the last, said the president of an executive search firm. Layoffs are everywhere, she said, with “many under the radar.”
But Viacom has been hit particularly hard, falling behind its cable competitors in ad sales, which in part led to a huge drop in its stock price, a whopping 62% this year.
Maybe it’s time for Viacom chieftain Sumner Redstone to line up at the Fed discount window. After all, this is the second wave of widespread layoffs for the media titan in two years, and some industry observers say the company is still bloated.
And maybe it’s time for Redstone’s salary to be capped at $1 a year, like executives at ailing financial companies are doing during this prolonged depression.
Sound like a plan?