Amid its restructure in the face of global economic pressures, entertainment giant Viacom has reduced its staff by 7%, resulting in a total of 850 job losses across all divisions of the company. Senior level management salary increases for 2009 have also been suspended.
Viacom, which owns Nickelodeon, Noggin and Paramount Pictures, will see its efforts resulting in a pre-tax charge of between US$400 and US$450 million in Q4 2008 with the staffing and compensation actions and write-downs resulting in pre-tax savings of between US$200 and US$250 million in 2009.
Last month the entertainment giant recorded a 37% drop in Q3 profits from 2007 largely due to softening ad sales across its US networks and lower-than-expected box office revenue from studio arm Paramount.
However, Viacom’s media networks generate the lion’s share of operating income, making up 97% of it in 2007. And according to the Q3 2008 quarterly report, ad sales at Nickelodeon, MTV and Comedy Central dropped 3%.
Viacom has yet to confirm exactly where the staff cuts have occurred.