Viacom cuts 7 pct of staff, suspends some pay raises
By Paul Thomasch
NEW YORK (Reuters) - Viacom, the owner of MTV Networks and the Paramount movie studio, said on Thursday it will cut its workforce by about 7 percent, or 850 positions, underscoring the advertising slump afflicting most major media companies.
Viacom also plans to suspend salary increases for senior level management in 2009 and will write down the value of certain programing and other assets.
The cuts, which had been rumored for some time, come as Viacom's stock price has slumped about 67 percent this year, an even steeper drop than other media industry powers such as Time Warner and News Corp.
Viacom shares dropped 11 cents, or less than 1 percent, to $14.40 on the New York Stock Exchange following the news.
Across media, companies are struggling in the face of an advertising downturn that is shaping up to be the worst since 2001, when the bursting of the Internet bubble and the Sept 11 fallout dramatically slashed spending on marketing and advertising.
Viacom has also been fighting against poor ratings of two of its cable TV networks, MTV and VH1, while Paramount recently scaled back its film releases to help cut costs.
Between the job losses, salary freezes and write-downs, Viacom is expecting to see pre-tax savings of $200 million to $250 million in 2009.
"We are moving rapidly to adapt to the challenges presented by the current economic environment," Chief Executive Philippe Dauman said in a statement. Continued...