Cuts Loom at Discovery
By Anne Becker -- Broadcasting & Cable, 4/2/2007 8:11:00 AM
Discovery Communications plans a round of layoffs in the coming weeks. About 300 people are likely to be laid off, a figure that could climb as high as 10% of the company's workforce.
Staffers from the retail, education and international divisions could be let go on or before April 9, according to executives familiar with the situation.
As a long-standing company policy, says David Leavy, Discovery Executive VP, Corporate Affairs and Communications, “we never speculate on rumors of any structural or personnel changes we may or may not make.
The cuts come as new President/CEO David Zaslav continues to make his mark on the $12 billion media conglomerate. After being named to the slot in November, the former NBC Universal executive instituted a sweeping reorganization that cut Discovery Networks President Billy Campbell and a slew of other senior managers but did not include major layoffs.
On March 29, Discovery announced it will 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.
At the time of the February reorganization, Zaslav 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.
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.
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.
International business is expected to account for about a third of Discovery's $2.9 billion revenue this year. The company currently houses several autonomous regional operations, from London to Latin America, which program its channels in 170 countries. Some of their duties could be co-handled with U.S. staff.
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. They come at a time when shifting viewing habits have forced old-media TV operations to reassess their infrastructures.
Discovery plans to host its annual upfront presentation to advertisers in New York on April 5. During the first phase of the reorganization in February, Zaslav said priorities were strengthening core brands, reducing inefficiencies and clarifying Discovery's digital strategy.
