Hollywood gears up for more tough times in 2009

Thu Dec 18, 2008 6:30pm EST
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By Sue Zeidler

LOS ANGELES (Reuters) - The economic crisis and the threat of another labor strike are creating a "perfect storm" for Hollywood as major studios to brace for further layoffs early next year, according to studio executives and analysts.

"Indicators for Hollywood don't look good right now, based on the economy and the potential actor's strike. Layoffs around the studios would not surprise me," said Kurt Scherf, an analyst with consulting firm Parks Associates.

Job cuts have already swept through some media companies. This month, General Electric Co's NBC Universal, home to Universal Pictures, said it would cut 500, or 3 percent, of its staff, while Viacom Inc, owner of Paramount, cut 850, or 7 percent, of its workforce.

Layoffs at those companies' respective film studios totaled 70 at Universal and 150 at Paramount, say studio executives.

Looking ahead, industry insiders see more belt-tightening at Walt Disney Co, Time Warner Inc's Warner Brothers and Sony Corp's Sony Pictures.

Sony Pictures' parent, Sony Corp, has already announced 8,000 job cuts chiefly from its electronics division, but various Hollywood insiders say they believe the studio will cut jobs in January.

Sony Pictures declined to comment, but a source familiar with the studio said it had already started lowering costs by reducing travel expenses, overtime and restricting the filling of open or newly vacant positions.

Job cuts are also expected to be announced at Warner Bros in early 2009, said one executive familiar with the studio.   Continued...

<p>Tourists pause on a walkway at a shopping mall which offers a view of the famed Hollywood sign at the hills in California March 14, 2008. REUTERS/Fred Prouser</p>