Viacom lays off 7 percent of workforce
Entertainment conglomerate, parent company of MTV Networks, says it expects to save $200 million to $250 million in 2009 with the cutbacks.
Update at 7:59 a.m. PST: A RealNetworks representative quashes a rumor about a RealNetworks-MTV joint venture.
The long-expected layoffs at Viacom, parent company of MTV Networks, have finally taken place.
According to an internal memo (first leaked to gossip blog Gawker), 850 positions have been cut. That amounts to 7 percent of the company's workforce.
"Our advantages and best efforts can't completely protect Viacom from the very serious and broad-based challenges of this economic recession," CEO Philippe Dauman wrote in the e-mail. "Viacom's long-term health will depend on our shared commitment to adapt, to innovate and to make difficult choices. To compete and thrive, we need to create an organization and a cost structure that are in step with the evolving economic environment."
A press release Thursday from Viacom gave a more detailed explanation: "The restructuring and write-down together will result in a pre-tax charge of $400 million to $450 million, or $0.42 to $0.48 per diluted share, in the fourth quarter of 2008. These staffing and compensation actions and write-downs are expected to result in pre-tax savings of $200 million to $250 million in 2009."
It's been common knowledge that Viacom layoffs were on the way, and the company had already canceled its big holiday parties this year, giving employees two extra vacation days in exchange.
In addition to MTV, Viacom owns BET Networks and Paramount Pictures. Its cable channels include Comedy Central, Nickelodeon, VH1, and Noggin.
According to a separate post on Gawker, the New York office for MTV-RealNetworks joint venture Rhapsody America is rumored to have closed, leaving 25 people jobless. RealNetworks spokesman Ryan Luckin said in an e-mail to me on Thursday that the rumor is false.