Viacom Monday began cutting 250 staffers across its U.S. MTV Networks division in an effort to funnel money into new digital-media initiatives. Substantial cuts are also expected in international offices.
The cuts are expected to reach across MTV Networks' stable of brands. The goal is to create shared responsibility in functions such as human resources, legal and production. The move is similar to those which many traditional media companies are making as they struggle to change their existing business models to meet new preferences of media consumption.
MTV Networks Chairman/CEO Judith McGrath announced the planned restructuring to staff in an e-mailed memo Monday morning. Praising the company's multiplatform efforts to date, she said, "to keep winning in this revolutionary environment," the company has to "refine our business and organizational models."
"Our industry is at an inflection point, and many companies are going through the process of adapting their business models and organizations to the new realities," the memo read.
This week, department heads from across MTVN's divisions - Music and Logo; Kids and Family; Entertainment; International; Sales and Strategic Services - will begin meeting with employees selected to be cut. The company expects to complete that process by week's end, McGrath said.
The company also plans to make significant slashes in its host of international offices.
The cuts are the beginning of an expected larger overhaul from new CEO Philippe Dauman and CFO Thomas Dooley, who was anointed in September by Chairman Sumner Redstone after he fired veteran MTV chief Tom Freston.
That overhaul began in January, when Dauman and Dooley saw the ousting of MTVN President/COO Michael Wolf, the one-time consultant who left the company after months of speculation little more than a year after taking the job.
At the same time, one of MTVN's longest-standing senior executives--President of Affiliate Sales/Marketing Nicole Browning, who is a two-decade employee of the company - said she was leaving as well.
Viacom isn't alone in making cuts to restructure with digital ventures as a priority. Just last week, Discovery Communications announced a restructure with cuts at its cable networks and new consultants advising on digital ventures and syndication. In October, NBC Universal began laying off some 700 employees through a cost-cutting initiative branded "NBC 2.0."
With word of the impending cuts spreading over this weekend, employees at MTVN, many of whom have spent years with the famously familial company, feared the worst. McGrath acknowledged that in her memo.
"The close-knit culture we have at MTV Networks makes this especially tough," she said. "Everyone here makes invaluable contributions to the company every single day, and it is painful to see hard-working, dedicated people leave us. Please know that we are committed to helping our colleagues who are leaving during this transition in every possible way."