Recession 2008: Continuing Coverage of the Economic Impact on The Media Business
Viacom announced plans to cut 850 job Thursday, or 7% of its workforce, and says there will be no senior level raises in 2009.
The cuts are part of restructuring that the company expects to result in a $200 million to $250 million savings in 2009.
The company said it would also write down "certain programming and other assets." It did not say which.
Cuts will be implemented across all divisions, which means they could affect MTV, VH 1 CMT, Logo, Comedy Centrol, Spike TV, TV Land, Paramount Pictures, Neopets, Nickelodeon, Nick at Nite, BET and more.
“We are moving rapidly to adapt to the challenges presented by the current economic environment," said Viacom President and CEO Philippe Dauman in announcing the cuts. "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.”
Last month, Wunderlich Securities downgraded Viacom’s stock from "buy" to "neutral" based on the weakening national advertising market on top of the already weakening local ad market. That followed the company's announcement two weeks before that its third quarter earnings were down 37% despite a slight increase in revenues.
Viacom's announcement came at almost the same time as news that NBC Universal began laying off ad sales staffers as well as production and support staff.
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