Since last fall, showbiz has been feeling splashes of what Alan Greenspan called “a once-in-a-lifetime credit tsunami.”
Now the waves are starting to hit big.
Viacom announced Dec. 3 that it was slashing 7% of its workforce, some 850 jobs. The next day, NBC Universal announced 3% cuts, or 500 staffers, worldwide.
While schadenfreude is an intrinsic part showbiz, nobody was smirking. Because at other congloms, there is a sense of dread that the tsunami is going to hit everyone sooner or later.
Time Warner gutted its Time Inc. division earlier this fall. Industry players and investors alike are waiting for the shoes to drop at other media congloms. News Corp. hasn’t announced large-scale layoffs yet.
Every division at NBC U was impacted, with TV news the hardest hit. At Universal Pictures, around 70 people were cut, including staff at Focus Features.
In a letter to staffers, studio toppers Marc Shmuger and David Linde said cutbacks were due to “the challenges presented by the struggling economy” and that it will institute cost-saving measures that include “scaling back on travel, overtime, consultants, premieres, conferences, newspaper marketing and general administrative costs.”
In other words, they’re targeting cuts in the same areas as everyone else as the biz braces for a long and brutal recession.
The NBC U reductions include broadcast, cable, syndication, features and parks.
At Viacom, MTV Networks will shoulder the brunt of the pinkslips, with the staff trimmed by as many as 500. Insiders say the layoffs will be concentrated in the Music/Logo/Films Group headed by Van Toffler.
Paramount Pictures will endure another series of pinkslips.
In an email memo to the Par staff — and, this being Hollywood, immediately forwarded to people all over town — chairman-CEO Brad Grey wrote, “These reductions are across the studio: accounting, business/legal affairs, corporate and government affairs, home entertainment, human resources, information technology, production, studio lot operations and Vantage.”
The Paramount Vantage label is clearly being hard hit, with Nick Meyer ankling, though he has three years remaining on his contract. (Meyer took the label’s reins in January after John Lesher segued to the No. 2 creative post at the studio.)
News of Viacom’s belt-tightening came on the same day AT&T laid off 12,000 workers, while CEOs of the bankrupt Big Three automakers groveled in Congress for a financial bailout.
Last week a handful of major book publishers chopped jobs. Even the Masters of the Universe at white glove Carlyle Group axed 100 positions, as Carlyle became the first big private equity firm to cut staff thus far. And digital media company RealNetworks, which runs the Rhapsody online music service with MTV and is also a major player in Web gaming, announced Dec. 4 that it is laying off about 130 people, 7.5% of its staff.
At NBC U, the Peacock’s news divisions were hit particularly hard with a rep admitting that the NBC News axings exceeded the 3% overall rate. An NBC U insider says the cuts affected both international and domestic news staffs, and they were spread fairly evenly across the programming grid. They include some in the exec ranks, though an exact number was not available.
On the cable news side, one insider says surging MSNBC was “relatively unscathed.”
But Bravo and USA, the bright spots of NBC U’s TV stable, appear to have come out mostly unscathed.
Though Hollywood loves a happy ending, few believe the situation will brighten in 2009.
Mike Flaherty, Dan Frankel, Marc Graser, Jill Goldsmith, Dade Hayes, Dave McNary, Michael Schneider, Tatiana Siegel and Anne Thompson contributed to this report.