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NBC Universal to Cut 700 Jobs, Slash Spending

Oct 19, 2006  •  Post A Comment

NBC Universal plans to eliminate about 700 jobs, or 5 percent of its workforce as part of a sweeping plan to cut $750 million in administrative and operating costs and remake itself for the digital age.

The plan, to be announced today, portends major changes at the news division and confirms fears of employees who have been living with rumors of layoffs for months. The staff reduction at the General Electric Co. unit, which houses the NBC broadcast network and cable channels including USA Network, will begin with buyouts, offers of early retirement and attrition.

The restructuring follows a July initiative that NBC Universal Television Group President Jeffrey Zucker billed as a comprehensive review of a media business that needs to change with evolving digital technologies. The company has been challenged by a ratings decline at NBC that is only beginning to turn around, and NBCU last week said second quarter profit dipped 10 percent from a year earlier.

In a conversation with TelevisionWeek Wednesday evening, NBC News President Steve Capus said some job cuts will take place this year and the majority will probably occur in 2007. Eliminating jobs held by people with whom one has worked for many years is not easy, Mr. Capus said.

“Making these changes will allow us to re-invest in growth areas, and that is absolutely part of the strategy,” Mr. Capus said. “This is not slash and burn and leave it all behind. We are making an investment in the future of this organization. … I am going to make darn certain that it has a long run in the future.”

Mr. Capus declined to speak on the record about how many jobs are likely to be lost in his division, which produces the top-rated “Today” morning news show, the No. 1 evening newscast and the leading Washington-based newsmakers show on Sundays. He said the cuts will not disproportionately hit his business.

The new plan, dubbed NBCU 2.0, will bring big changes for the news division, which has been the focus of the most persistent job-cut rumors. The boldest stroke will move MSNBC to NBC News’s Manhattan headquarters at 30 Rockefeller Plaza from the cable channel’s New Jersey home of 10 years.

Some MSNBC departments may be moved down the banks of the Hudson River to CNBC’s spacious operations in Englewood, N.J., Mr. Capus said.

While details remain fluid, plans include turning the third and fourth floors at 30 Rock into a two-story, trading-floor sort of hub for NBC News. The division is currently spread over 10 floors at the building, which is a top tourist attraction in New York City.

“I don’t think it’s been touched since the days of Huntley-Brinkley,” Mr. Capus said of the building, referring to the NBC news show that dominated the ratings from the late 1950s through the 1960s.

Mr. Capus denied that NBC’s ratings slump, which is mending this season with strong performances from shows including “The Office” and “Heroes,” is a direct cause for the reorganization.

Seismic shifts that have hit many media companies in the digital age have set off a “tsunami,” Mr. Capus said.

“Either you drown or you ride the wave,” he said. “We need to be greater than the sum of our parts. We need to do this.”

NBC News will collaborate more closely with a number of operations, including business-news cable channel CNBC, which does not report to news, and the news operations of NBC-owned TV stations, along with the Telemundo network and local news teams.

“Why should each of them have a booking unit?” Mr. Capus asked, explaining how the plan will eliminate redundancies.

Mr. Capus, said the control room for “NBC Nightly News” will move across the street from 30 Rock into the space that houses the “Today” morning show, which this summer got a high-definition studio and control room.

The question of where to put the “Nightly News” studio is among the questions still to be answered, Mr. Capus said.

“I met with [radio and MSNBC morning personality] Don Imus this morning about his show,” Mr. Capus said. “We literally are working out how we are going to do this. We have looked at so many options.”