Technicolor Trims Grass Valley

Will eliminate 625 jobs worldwide

Technicolor, the French conglomerate formerly known as Thomson, announced Wednesday that it will reorganize the Grass Valley professional broadcast equipment business unit that it has been trying to sell since January 2009.

In an effort to bring the business back to the break-even point, Technicolor will eliminate 25% of Grass Valley's workforce, totaling 625 jobs worldwide. It will reorganize Grass Valley into three distinct segments: broadcast, headends and transmission.

Technicolor said the moves are being made to adapt Grass Valley, which makes cameras, routers, switchers, servers, editors, transmission and compression gear, to "a strongly deteriorated business climate" that saw its revenues fall 31% between 2008 and 2009 and losses total $109.5 million.

Grass Valley was deemed by Technicolor to be a non-core business last year when the company announced that it would focus "upon services for content creators and distributors" through its film-processing and network origination services and digital set-top products.

Since then, there has been speculation that the unit would be acquired by another broadcast conglomerate such as Harris or by a private equity firm. At the IBC show in Amsterdam last September, Grass Valley SVP Jeff Rosica said a deal for Grass Valley was imminent, and press reports at the time identified Beverly Hills private equity firm Platinum Equity as the most likely suitor. But no deal has been closed since then.

The reorganization plan, which involves all major Grass Valley sites worldwide including Germany, Japan, the Netherlands, USA and France, will be presented to "duly-designated personnel representatives in the countries involved," said Technicolor. The company added that it will attempt to make the Grass Valley job cuts "in a responsible fashion" and take "each individual's situation into account," consistent with the company's human resources policy.

In an email exchange, a Grass Valley spokesperson indicated that most of the job cuts would fall outside the U.S., with less than 100 jobs eliminated domestically. The job cuts will happen in phases and are scheduled to be completed by June.

No existing Grass Valley product lines are being directly discontinued as part of the reorganization. Servers, switchers, routers, cameras and newsroom automation products will be placed in the Broadcast segment, while encoders for cable, satellite and IPTV operators will be placed in the Headend segment. Transmission will consist of radio and TV transmitter products. Rosica will continue to serve as senior VP and head the Broadcast business, while Christophe Delahousse will lead the Transmitter and Headend businesses.

Grass Valley's NAB plans remain unchanged, and the company has also committed to exhibiting at IBC again next September, the spokesperson added. The company provided no update on the divestiture of Grass Valley, but indicated that discussions with interested buyers are continuing.