More layoffs at Lionsgate
Studio eliminates 45 jobs, reduces overhead by $15 milThe boxoffice success of "The Haunting of Connecticut" was too little, too late for a few dozen Lionsgate employees, whose pink slips coincided with the studio's latest film release.
The mini-major eliminated 45 jobs Friday by laying off 27 employees, making another 10 full-timers either independent contractors or consultants and deciding not to fill eight open positions.
Having cut 41 jobs in November, the latest round of layoffs leaves Lionsgate with 500 employees in Santa Monica, New York, Toronto and the U.K.
The job cuts and a hiring freeze initiated in the summer should reduce the studio's annual overhead from about $135 million to $120 million, sources said, about equal to 8% of Lionsgate's expected fiscal year revenue of $1.5 billion.
The savings should put a smile on the face of shareholder Carl Icahn, who has been so disappointed in his Lionsgate investment that he has threatened a proxy fight. The billionaire financier owns 14.5% of the studio's shares.
Having failed to persuade Lionsgate to let him place three people on its board of directors, Icahn's next move was to offer to purchase $325 million in company debt. That offer expires April 20.
Lionsgate, meanwhile, has hired a team of lawyers and public relations professionals to help fend off Icahn's unsolicited intrusions.
While Icahn has chastised Lionsgate for not being frugal, insiders said the studio's plans for layoffs were in the works before Icahn began creating strife for the company last month.
Lionsgate's latest round of job cuts comes despite such recent movie successes as "Tyler Perry's Madea Goes to Jail" and "My Bloody Valentine 3-D" and hit TV shows including "Weeds" and "Mad Men."
Sources said the weak links at the studio are DVD sales and an advertising slump that has especially affected syndicated shows such as "Family Feud" and "Trivial Pursuit: America Plays."
Shares of Lionsgate fell 6% on Friday to $5.08. Icahn amassed his stake in the company over a few years, paying an average price of about $6.80 per share.