This article was updated at 7:04 p.m.
NBC Universal TV topper Jeff Zucker said the company will make broad and deep job cuts across all areas of the company, from primetime to news, Telemundo and the film studio. Buyouts and unfilled positions will come first, followed by layoffs.
As employees in Gotham and in Hollywood watched or listened to Zucker speaking in the “Today” studio Thursday, the nagging question was “what next?”
Zucker said the cuts — 700 employees, or 5% of NBC U’s global workforce — “would be evenly split across the company,” but declined to specify how deep they would be and where. Someone in the audience asked if other areas of the company were being punished for the recent struggles in primetime.
But Zucker disputed that notion.
“I think this has little to do with NBC — the fact is, the only real issue at NBC in the last two years has been the performance of the primetime schedule,” he said later. “The rest of the company has performed at tremendous levels.”
NBC U chairman Bob Wright, who introduced Zucker before dashing out to do an interview on the restructuring with CNBC, was eager to cast the initiative as a companywide restructuring and belt-tightening
Sources at Universal Pictures, however, said they don’t expect to see major trims. One reason they cite is the numerous owners the studio’s had in recent years. Typically, the first order of business for new ownership — whether Seagram, Vivendi, Barry Diller or NBC — was to pore through the operating budget, looking for places to cut. With so many eyes going over the budget over the years, U says the studio has already been trimmed lean.
Universal Studios prexy Ron Meyer’s plans to combine the marketing staffs for features and homevid was included in the NBC U 2.0 announcement, but the moves were in the works before Zucker’s cost-cutting announcements.
News operations, singled out by Wright as an “area of great consolidation opportunities,” will be hit hard. About two-thirds of the TV division’s headcount is involved in the gathering and dissemination of news, be it at the network, MSNBC, local stations or Telemundo.
Primetime will also see changes. Taking a page from its rivals, NBC is making a big push into reality TV, which it sees as the new staple of the first hour of primetime at 8 p.m.
“It has not been a strength, but we are saying we are going to up our commitment to it,” said NBC Entertainment prexy Kevin Reilly. “We are going to play with the mix and shift some money away from scripted.”
The 8 p.m. hour is dominated by reality-based programming such as Fox’s “American Idol,” ABC’s “Dancing With the Stars” and “Extreme Makeover: Home Edition” and CBS’ “Survivor.”
Viewer levels at 8 p.m. have been on the decline, and that daypart airs at 7 p.m. local in central and mountain time zones, making it less appealing for advertisers.
The exception will be Thursdays, where NBC has “The Office” and “My Name Is Earl,” its two best laffers since the decline of “Friends.”
When the network fell from first to fourth two years ago, it left a $800 million hole in the balance sheet due to diminished advertising revenue. Profits have declined for four straight quarters, making NBC U the least-profitable division in GE’s portfolio.
More than cost-cutting, Zucker said NBC U 2.0 is about a new way of doing business. He pointed to the net’s hit of the fall, “Heroes,” which airs on NBC Mondays; goes online with advertisements the following day; is then made available for download via iTunes for $1.99; and finally heads to the Sci Fi Channel, where a rerun airs on Friday.
“All of this would have been unthinkable just a few years ago,” Zucker said.
But even as primetime has struggled, NBC News shows like “Nightly News” and “Today” have stayed dominant, leaving news employees wondering why they should shoulder the pain.
“I know some people have suggested this is happening because entertainment took it on the chin and you guys are being punished, but that’s not the case at all,” said NBC News prexy Steve Capus. “We need and want to change the basic structure of newsgathering and take advantage of each entity that practices news.”
Nevertheless, news will be asked to consolidate bureaus and cut staff, including on-air talent.
To consolidate some network and local news operations, NBC U is creating a consolidated news facility in Burbank that will serve the network, MSNBC and CNBC, as well as Telemundo, KNBC, KVEA and KWHY.
Parts of MSNBC will move from Secaucus, N.J., to NBC headquarters at 30 Rockefeller Center, while others will move into CNBC headquarters in Englewood Cliffs, N.J.
At the town meeting, Capus singled out “Hardball With Chris Matthews” and “Hardball With Keith Olbermann” — the net’s top-rated shows — as moving to 30 Rock. He didn’t mention “Tucker” or “Scarborough Country,” whose destination is unclear.