The new austerity has begun in earnest as broadcast and Internet companies slash jobs, bracing for a slowdown in advertising sales.
On the heels of news that CNN and NBC will lay off up to 10% of their staffs, ABC is instituting cost-cutting measures in hopes of avoiding layoffs.
ABC News expects to trim $15 million-$20 million from its annual budget by combining units and reassigning staffers. Belt-tightening comes after ABC News prexy David Westin made at least two rounds of cutbacks last year. Sources said “Weekend” and “World News” operations will be combined and the news division will make an effort, wherever possible, to cut back from three-camera shoots to two-camera shoots.
While no layoffs are planned, ABC News may not renew a number of correspondents’ contracts. A source said a “handful” of correspondents would be affected, but not top-tier talent such as Diane Sawyer and Peter Jennings, who have multiyear deals in place. ABC News reps declined to comment.
In addition, a hiring freeze is in place at ABC, although there are apparently some possible exceptions to the rule after close review.
The recently announced layoffs at NBC will hit every department and division, including the news division (Daily Variety, Jan. 12).
No staff cuts are expected at CBS News. “While upholding the high standards of CBS News, we continue to be budget-conscious because that is today’s reality,” CBS News spokesman Sandy Genelius said.
The ABC O&O stations are implementing their own cost-cutting measures. For instance, the upcoming NATPE confab has never been hugely important for the ABC station group, since its deals with program suppliers are tied up far in advance. But this year, even fewer people from the station group will attend, as they’ve been told to cut back on travel wherever possible.
Meanwhile, NBCi, the Peacock’s Internet wing, announced a second round of major layoffs Thursday, with an estimated 150 employees, or about 30% of the Netco’s workforce in the Burbank, Gotham and San Francisco offices, receiving pinkslips.
The NBCi cuts mark the latest pullback by media companies on the Internet. On Wednesday, CNN said it would cut more than 100 jobs in its online operations as part of a reorganization. News Corp. also recently dramatically reduced its online staff.
NBCi restated its revenue projections for 2001 downward from $150 million to $100 million. Execs said they still expect the Netco to turn a profit in late 2001 or early 2002.
NBCi previously axed 170 employees in a cost-cutting move in August. Prexy-chief operating officer Edmond Sanctis also resigned from the company and a restructuring of the Netco’s offerings was announced, with disparate sites Xoom.com, Snap.com and AllBusiness.com combined into one.
NBCi said more details on the restructuring will be made available Feb. 7, when the Netco releases its fourth-quarter earnings.
Calls to the company seeking comment were not returned, although a statement was released.
“We are determined to reach profitability within the same time frame we reported at the end of the third quarter 2000,” NBCi CEO-director Will Lansing said in a statement. “But to reach this goal, we needed to make difficult decisions on the operational side of our business to account for the challenges within the online advertising market.”
In the January issue of eV, NBCi’s Lansing said the Netco was “past massive layoffs.”
NBCi stock closed at $4.00 Thursday, down almost 4.5%; its one-year high, reached in late January 2000, was $106.13.