Fox Sets $250M Cost Cuts in TV, Movies
21st Century Fox is looking to cut its costs by $250 million, telling its staffers that the company needs to reduce staffing even though its businesses are hitting new highs.
The company said that after reorganizing some of its units over the last 18 months—including Fox Sports, FX Networks, Twentieth Century Fox Television and Fox Broadcasting—it will be offering some employees what it called a "generous benefit package if they decide to voluntarily resign from the company, effective May 23, 2016."
"Our industry is changing rapidly, presenting new challenges and even more opportunities at every turn. For a company that has always embraced change and innovation, these are exciting times," Fox Networks Group CEO Peter Rice said in an internal memo. "To ensure we make the most of this new world, we need to adjust, adapt, and organize for the future. With this in mind, through the remainder of this fiscal year, we will be undertaking some structural changes, increasing investment in some parts of the company while making cost reductions in other areas."
The TV business is facing challenges from digital competitors that are reducing traditional ratings and pinching advertising revenue. Cord-cutting has also become a big worry as over-the-top rivals like Netflix siphon off viewers. Other big media companies, including Viacom, Time Warner and Scripps Networks Interactive, have also restructured and cut staff in the past year.
In a statement, 21st Century Fox said. "As we position 21CF for the future, we want to ensure our organization remains agile and structured to fully capture the many opportunities ahead of us. With this we are looking across our film and television businesses to transform certain functions and to reduce costs. As part of this process, which is in its early stages, today some colleagues from Fox Networks Group and 20th Century Fox will be offered a generous benefit package if they opt to voluntarily leave the Company."
Here's the text of the memo from Peter Rice:
Our industry is changing rapidly, presenting new challenges and even more opportunities at every turn. For a company that has always embraced change and innovation, these are exciting times. To ensure we make the most of this new world, we need to adjust, adapt, and organize for the future. With this in mind, through the remainder of this fiscal year, we will be undertaking some structural changes, increasing investment in some parts of the company while making cost reductions in other areas.
During the past 18 months, we have aligned our company around our core consumer-facing brands: reorganizing Fox Sports; expanding FX Networks; bringing together Twentieth Century Fox Television and FBC; uniting our ad sales teams into a leaner and more agile operation; purchasing True X; creating the new National Geographic Partners; and, most recently, restructuring our international channels to capitalize on our expertise in major regions.
As the next step in this reorganization, colleagues who fit a specific set of criteria will be offered a generous benefit package if they decide to voluntarily resign from the company, effective May 23, 2016. Colleagues who are eligible for this offer will receive a confidential email in the next few hours with specific terms and benefits. Again, the program is completely voluntary.
This restructuring is coming at a time when all of our businesses are hitting new heights, which I know may be confusing. Last night's Grease: Live on FOX was a groundbreaking and spectacular production. The premiere of the X-Files, made by Twentieth Century Fox Television for FBC, was watched by a global audience of more than 50 million people. Fox Sports is home to many of the world's biggest sporting events including last week's NFC Championship game, this month's Daytona 500, the next World Cup and next year's Super Bowl. American Crime Story, which is produced by Fox 21 Television Studios and FX Productions and premieres on FX tomorrow, is one of the year's most anticipated new series. Our new partnership with National Geographic has made us the world leader in visual factual entertainment across all platforms. These are just a few of the highlights across our business that, when taken together, make this an incredibly exciting creative time at the company. It is important, however, that we organize ourselves for tomorrow rather than resting on the laurels of today, and the best time to do that is when we are in a position of strength.
I realize change is difficult, but we will be stronger if we take this opportunity to position our organization for the future. This is the right thing to do for our business because although technology is rapidly changing our world, the global hunger for our brands and content will continue unabated and making the right decisions now will provide our company with many exciting opportunities for continued growth and success. I thank you all in advance for your professionalism and support.
(Photo via Pictures of Money's Flickr. Image taken on Sept. 17, 2015 and used per Creative Commons 2.0 license. The photo was cropped to fit 3x4 aspect ratio.)
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Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.