NBC Universal chief Jeff Zucker told staffers in a memo Friday that the company will be cutting spending by $500 million next year. According to the memo, that figure equals about 3% of the company’s budget.
“We are living in a time of unprecedented economic challenges, and it is increasingly clear that the worldwide economic slowdown will continue well into next year,” Zucker wrote. “As we have been working on our budgets and planning for 2009, it has become evident that the decline in consumer confidence and spending will impact our operations.”
The internal announcement comes on the heels of NBC Universal showing a 10% bump in third-quarter profits.
A source close to the network pointed out that the move positions the company to not only handle the current economic slowdown, but potentially be better positioned on the other side to avoid further cutbacks.
The full memo:
We are living in a time of unprecedented economic challenges, and it is increasingly clear that the worldwide economic slowdown will continue well into next year. As we have been working on our budgets and planning for 2009, it has become evident that the decline in consumer confidence and spending will impact our operations.
The leadership team of the company agrees that we must take steps now to prepare for these new economic realities. As a result, all of our business leaders are being asked to cut their spending projections for 2009. We are asking for a reduction of approximately $500 million across the company, which represents about 3% of our overall budget.
While each business leader has flexibility in how to meet this goal, we have asked them to focus on three areas: reductions in promotion expenses; in discretionary spending, such as travel and entertainment and outside consultants; and in staffing costs. We have also asked them to find savings by going through our Sourcing department for all major purchases.
This kind of message is never easy, but it is the right step to make, and the right time to make it. We have no choice but to respond quickly to the external economic forces that are affecting the entire world economy.
We have an incredible portfolio of strong, dynamic, world-class brands across the global media landscape. We are as well positioned as any media company today; these moves will ensure that we continue to be so.
Thank you for your support.