NBC Universal to make $750 million in cuts Media giant plans to reduce staff, scripted shows and budget for news
MSNBC | October 19, 2006
NEW YORK - NBC Universal plans to cut its operating expenses by $750 million by eliminating employees, cutting back on scripted shows and slashing its news budget, Chairman and CEO Bob Wright said Thursday.
The global media company's restructuring comes as part of a wide-ranging strategic initiative called “NBCU 2.0,” which is designed to assure future growth, streamline and strengthen operations, and exploit opportunities created by the rapidly evolving digital and global marketplace the company said.
“Success in this business means quickly adjusting to and anticipating change,” Wright said in a statement. “This initiative is designed to help us exploit technology and focus our resources, as we continue our transformation into a digital media company for the 21st century.”
The company-wide initiative is expected to reduce the company's annual administrative and operating expenses by $750 million by the end of 2008. It will also result in workforce reduction of approximately 700 positions, or about 5 percent, over the same time period.
The changes come as more and more viewers and advertisers gravitate toward new media, Wright told The Wall Street Journal in an interview published Thursday, ahead of the announcement. He said the moves would restore the company to double-digit growth next year.
“As we reprioritize ourselves toward digital, we've got to be as efficient in our current businesses as possible,” said Wright.
The measures will also affect movie production and other operations at NBC Universal, which is owned by General Electric. NBC Universal also said it will stop scheduling high-priced dramas and comedies during the 8 p.m. to 9 p.m. slot.
Jeff Zucker, chief executive of NBC Universal's television group, said he'll focus on cheaper programming. He told the Journal that scripted shows cost too much given the lack of advertiser interest.
NBC's cost-saving plan involves laying off people from the company's 11 news divisions, including on-air talent.
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