NEW YORK — CBS is mounting a cost-cutting program among headquarters staff in a bid to boost profits and prepare for its spinoff from Westinghouse Electric Corp.’s industrial businesses.
A spokesman confirmed plans to shave expenses through a program of “shared resources” across divisions that will eliminate duplicate functions in accounting and other areas by merging them into single, companywide departments. Some layoffs are expected as part of the process, and analysts already have been told to expect $30 million in cost trims this year, although they’ve seen no evidence of any so far.
Bill Korn, a Westinghouse exec last month named exec VP, strategic planning, business development and broadcast operations at CBS, will spearhead the effort, also aimed at finding ways to boost revenues. The CBS network lost $44 million in the first quarter, contributing to an overall $151 million loss at the parent company.
The appointment of Mel Karmazin to run TV as well as radio stations was applauded by Wall Street, sending Westinghouse stock higher, and though Karmazin may not be directly behind the latest move, it clearly has the enthusiastic support of the company’s largest individual shareholder.
Still, “there’s only so much you can do with cost-cutting,” said Frank Bodenchak, a Morgan Stanley analyst. “It’s a one-time event. On the TV side, growing revenues is going to be more important,” an accomplishment made easier by any improvement in CBS’s ratings.