Update: NBC 2.0--Staffers Get 'Sugarcoated' Pitch
By Anne Becker -- Broadcasting & Cable, 10/19/2006 5:27:00 AM
Top-level NBC staffers convened in the new Today Show studio today for a 1 p.m. town hall meeting about the impending company-wide cuts. The meeting, which lasted about a half hour, was telecast for lower level employees on NBC’s internal channels, the “Jerrold Channels.”
Bob Wright kicked it off with minimal comments before ceding the floor to Jeff Zucker for what one insider described as "sugar-coated" comments of his own. Questions that had been e-mailed in before or during the meeting were then read off by a young, male staffer and answered by Zucker, TV Group COO Randy Falco, TV Stations President Jay Ireland and NBC News President Steve Capus. The quartet gave little information, declining to name who was going and staying and how many would be cut from any given division.
Struggling under weak ad sales and profits, NBC Universal set a structuring plan to slash annual expenses by $750 million in part by cutting 700 jobs. The moves, which have been in the works for more than a year, were announced today by GE Vice Chairman and NBCU Chairman/CEO Bob Wright.
The plan, which the company is calling "NBCU 2.0," will streamline NBC U's news operations and drop pricey scripted dramas from the 8 p.m. hour on the network as NBCU redirects resources from analog to evolving digital businesses, according to the company and published reports.
Talk in New York is that the layoffs will begin as buyouts to interested parties.
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Restructuring that will touch all of NBCU's divisions - broadcast, cable, movies, theme parks and others - is aimed at cutting annual administrative and operating expenses by $750 million by the end of 2008 and cutting the company's workforce by 5% in the same period. The company says reallocated expenses will lead to digital revenues that top $1 billion by 2009.
NBC U profit dropped 10 percent during the third quarter, pulled down by lower ratings at NBC, parent company General Electric reported last week.
"Success in this business means quickly adjusting to and anticipating change," said Wright 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."
Affecting the TV Group, cable network MSNBC will shutter its Secaucus, New Jersey operations and the channel will move to production facilities at NBC's 30 Rockefeller Plaza New York headquarters, and New Jersey--a move that has been talked about for years. The company is also consolidating news operations in California, creating a central facility in Burbank to house news ventures from NBC and Telemundo KNBC, KVEA and KWHY.
In its entertainment TV division, the company says it will reduce its "dependence on traditional content distribution methods and advertising models." That includes delivering programming on various digital distribution platforms, including its own broadband websites and iTunes. NBC also looking to ease off of scripted dramas, that can cost several millions of dollars per episode, in the 8 p.m. time slot in favor of less expensive game shows and other fare, according to the Wall Street Journal.
The network has struggled since falling from first place after losing top-rated shows Friends and Frasier. The network invested heavily in new programming this season and, despite bright spots which include the new drama Heroes, NBC has placed a solid third so far this TV season behind CBS and ABC most nights during primetime.
"We have to recognize that the changes of the next five years will dwarf the changes of the last 50," said NBC U TV Group CEO Jeff Zucker in a statement.
Changes elsewhere include a increased focus on Hispanic network Telemundo, consolidation of marketing departments within movie studio Universal Pictures, and cost cuts at the NBCU's theme parks in L.A. and Orlando, Fla.
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