Discovery Cuts 200
By Anne Becker -- Broadcasting & Cable, 4/9/2007 10:00:00 AM
Discovery today cut approximately 200 staffers, 3% of its workforce, in the second round of an internal restructure instituted by new President/CEO David Zaslav.
The cuts came predominantly from the US Networks group, including Discovery Channel and Animal Planet; the Education group; and some Corporate Service groups, including production, corporate communications and technological services. About 20% of the aggregate staffs of those divisions were cut.
Most of the jobs were located in Discovery's Silver Spring, MD headquarters. The commerce group, which includes Discovery's retail stores and was expected to incur sizeable cuts, is still under strategic review.
As originally reported in B&C, the company had marked today (April 9) for the cuts in an effort to trim unnecessary expenses and reinvest the funds into growth areas. The company is projected to bring in about $2.9 billion in revenue this year.
After Zaslav was named to the slot in November, the former NBC Universal executive reorganized Discovery's senior ranks, cutting Discovery Networks President Billy Campbell and a slew of other senior managers. The wider layoffs are designed to free up funding to pump into original programming, marketing and digital extensions, three areas Zaslav has said he wants to grow.
"Today is the second phase of a detailed reorganization of Discovery and is designed to build an aggressive organization that is able to take advantage of new opportunities across television and digital platforms," said David Leavy, Discovery Executive VP, Corporate Affairs and Communications. "The savings accrued from today's actions are not intended to drop to the bottom line. We will be investing back in original programming, the marketing of our brands and digital media extensions."
Discovery's cuts come at a time when shifting viewing habits have forced old-media TV operations to reassess their infrastructures. MTV Networks earlier this year cut 250 staffers and said it would redeploy funding into digital initiatives. U.S. media companies announced they were slashing a total of 17,809 jobs in 2006, 88% more than in the year before, according to Challenger, Gray & Christmas, a New York-based global outplacement firm that tracks layoffs.
Zaslav has worked fast to make his mark on the $12 billion media conglomerate; he joined the company just nearly 100 days ago. In addition to the staffing restructures, Zaslav also oversaw the company's decision to buy out Cox Communications, one of its part owners, for $1.275 billion and give Cox ownership of its Travel Channel. The goal is to streamline operations and boost the company's value on Wall Street.
He has also brought on a new digital chief, former NBC executive Bruce Campbell , and ushered in pricey new programming initiatives. At its upfront last week, Discovery announced a slew of new shows and a $50 million commitment to environmental-themed programming.
During the first phase of the reorganization in February, Zaslav said priorities were strengthening core brands, reducing inefficiencies and clarifying Discovery's digital strategy. He also told B&C he had issues with the company's education and international programming operations. And analysts have complained that Discovery spends too much in these areas.
The company eliminated 80 people in the education department in December. In the February reorganization, Zaslav folded the division back into Discovery's main infrastructure.Education was a pet cause of Zaslav's predecessor, Judith McHale, and Zaslav has praised the company's in-school offerings. But he criticized its direct-to-consumer business Cosmeo, a subscription homework helper introduced last year.
Human Resources today booked conference rooms across Discovery's Silver Spring, MD headquarters for meetings to inform workers that they were being let go, according to an executive with knowledge of the situation. Senior executives throughout the company were informed in recent weeks that they would need to cut members of their respective teams.
