Ad-Sales Staffers Just the Tip of Layoffs at NBC Universal

Employees Bracing as 3% of Work Force Expected to Be Cut

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NEW YORK (AdAge.com) -- NBC Universal is trimming about 500 jobs from its ranks, a testament to the rough waters media companies are encountering as consumers and advertisers start to cut spending.

The General Electric unit is cutting around 3% of the work force throughout NBC Universal, a person familiar with the situation said. In different units, that could take different methods.

Buyouts and early retirements
At NBC News, for example, many of the cutbacks will come through contract buyouts and early retirements, though people across the board will be affected, including some correspondents. Other units, including NBC's Universal movie studio, are also affected.

The headcount reductions follow a memo issued by NBC Universal CEO Jeff Zucker in October, in which he indicated that the company expects economic challenges to last well into 2009.

"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," the memo said.

The company has asked for "a reduction of approximately $500 million across the company, which represents about 3% of our overall budget," Mr. Zucker said. To get there, business leaders were told to focus on "reductions in promotion expenses; in discretionary spending, such as travel and entertainment and outside consultants; and in staffing costs," according to Mr. Zucker's memo.

Support-staff cuts
Already, NBC Universal cut about 30 staffers in the advertising sales department. The affected workers were described as support staff who didn't interface with clients. Staffers involved in ad-sales research also were let go.

Salespeople for the company's successful cable networks were largely unaffected. Workers located in NBC Universal's New York headquarters, as well as staffers in Los Angeles, Chicago and Detroit lost jobs.

'Meaningful pressure'
Broadcasters could find many of their models and operations challenged during this time. In a report issued Wednesday, Fitch Ratings analysts said they expect "pressure across a wider spectrum of advertising categories in 2009 than in the past downturn." Five of the top ten ad categories, representing over 40% of the ad mix, will "be under meaningful pressure next year," including retail, automotive, financial services, general services and airlines, hotels and car rentals.

Fitch said it "maintains that the auto industry is enduring structural changes that will permanently reduce local and national auto advertising, and that the supply of available advertising units will need to contract as a result."

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