Viacom Inc. is cutting about 850 jobs and NBC Universal is trimming about 500 staffers, a signal that television companies are struggling to adjust to the declining economy and slower advertising sales.
Viacom said it will cut its workforce by 7% and conduct a comprehensive review of its operations. NBC Universal’s reductions come to about 3% of its worldwide operations.
Although both companies cited the slow economy as reasons for the cuts, each has operational soft spots. Last quarter, Viacom’s operating income at its cable networks division slipped. NBC Universal’s broadcast network has suffered declining prime-time ratings along with its competitors. As of Nov. 16, NBC’s prime-time ratings among 18- to 49-year-old viewers have fallen 14% from last year, putting it in a tie for third place season-to-date.
Viacom will suspend senior managers’ raises and write down the value of some programming and other assets.
“We are moving rapidly to adapt to the challenges presented by the current economic environment,” Viacom President-CEO Philippe Dauman said in a statement. “The changes we are making in our organization and processes will better position Viacom to navigate the economic slowdown and generate sizable efficiencies that will help us to drive our business as the marketplace stabilizes and conditions improve.”
NBC Universal’s cuts are part of a $500 million budget-trimming plan announced two months ago.
“This kind of message is never easy, but it is the right step to make, and the right time to make it,” NBC Universal President-CEO Jeff Zucker said in an internal e-mail today. “We have no choice but to respond quickly to the external economic forces that are affecting the entire world economy.”
(Reporting by Michele Greppi, Ira Teinowitz and Jon Lafayette)