Layoffs loom at NBC Uni

Part of broad '2.0' realignment

NEW YORK -- NBC Universal rolled out Thursday a wide-sweeping series of changes and cuts designed to reduce about $750 million from the company by the end of 2008 under its NBCU 2.0 program announced earlier this year.

The restructuring, long rumored, will reduce NBC Universal's work force by about 700 positions, 5% of the work force. It wasn't immediately clear where the jobs would cut or whether there would be layoffs, buyouts or jobs left unfilled.

Among the moves NBC Uni said it would make are the moving of MSNBC's headquarters from Secaucus, N.J., to 30 Rockefeller Center in midtown Manhattan where the rest of the NBC News operation is located; a consolidated news operation in Burbank that will include NBC, Telemundo, KNBC, KVEA and KWHY; and what the company called the strategic realignment of domestic theatrical, home entertainment and television marketing and distribution divisions. There will be other consolidations at Universal Studios as well.

NBC Uni executives have said that the 2.0 changes were needed to deal with the shifting media landscape and to maximize digital revenues.

"NBC Universal 2.0 will prepare us for future growth from a position of strength," NBC Universal CEO Jeff Zucker said in a prepared statement. "With new momentum in prime time at NBC, continued leadership from NBC News, real growth at Telemundo, and solid performances in virtually every other division of our Television Group, there is no better time to re-engineer the company for the revolutionary changes to come."

The changes will be discussed at town hall meetings today in Burbank and New York led by NBC Universal Chairman Bob Wright and Zucker, sources told The Hollywood Reporter on Wednesday.

NBC Uni wasn't immediately specific with other details of the plan, other than to say that reviews were under way at NBC News bureaus around the world and through the company's divisions, including NBC television.

Sources cautioned that the cuts are not expected to be implemented Thursday but rather that there will be a discussion of the approach the company intends to take over the long term. Reps for NBC Uni TV Group declined comment late Wednesday.

The NBC News operation is said to be eyed for significant reductions as NBC Uni moves toward centralizing newsgathering and production operations throughout the company.

Also located in Secaucus is Weather Plus, the joint venture between NBC and its affiliates, providing a digital competitor to the Weather Channel, and NBC's national and international news desks. The move would reunite the news desks with the rest of the NBC News operation at 30 Rockefeller Center.

Some layoffs also are expected to affect NBC's entertainment division, which could face a reorganization in an effort to realign its programming and production operations to be more attuned to producing a wider range of content for platforms beyond the NBC broadcast network and cable outlets including USA Network, Sci Fi Channel and Bravo.

While parent company General Electric signaled last week that NBC Uni will report a profit increase during the fourth quarter, the division reported a 10% decline in third-quarter earnings. NBC has been mired in fourth place among the broadcast networks for the past two years in key demographics, though it has perked up one month into the new TV season, with primetime ratings up 9% in the 18-49 demographic. The NBC broadcast network claims the sleeper hit of the season so far in the rookie drama "Heroes," which has performed well for the network on Monday nights.

Two other units likely to face significant cuts are Telemundo, the Spanish-language network NBC acquired in 2001, and NBC News Channel, the Charlotte, N.C.-based unit of NBC News managed under a cooperative agreement with NBC affiliates. The branch produces hundreds of news stories each day to NBC's local stations, cable channels, foreign broadcasters and other news organizations. There also could be consolidation of news bureaus nationwide.

NBC has been in belt-tightening mode for at least a year, cutting costs as is the fiscal style of GE under its famed Sigma Six strategy (HR 8/16/05).

The cuts might be the steepest that NBC has experienced since 2001, when the company shed about 560 jobs, or 10% of its work force. NBC completed its merger with Universal Studios in 2004.

Cynthia Littleton, Nellie Andreeva and Andrew Wallenstein in Los Angeles contributed to this report.
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