Univision announces 6% staff reduction amid efforts to build Fusion, the millennial network
Univision Communications is eliminating nearly 250 positions, or about 6% of its workforce, as the Spanish-language media company struggles to navigate a changing landscape and expand its reach with millennial viewers through its Fusion news outlet.
The cost cutting announced Wednesday followed recent efforts by Fusion employees to join the Writers Guild of America, East. They also came a week after a caustic presidential election season that brought in fewer political ad dollars than anticipated. The closely held media company late last week reported a third-quarter net loss of $30.5 million compared with a profit of $109.8 million during the same period of 2015.
Revenue fell 8.3% to $734.8 million in the July-September quarter. That compares to the third quarter of 2015 when Univision notched sales of $801.5 million.
A write-down of nearly $200 million, largely to account for the substantially reduced value of Univision’s radio broadcast licenses, contributed to the company’s net loss.
Univision confirmed the layoffs Wednesday, saying the job eliminations were “part of a broader effort to streamline operations” in a turbulent environment. The layoffs were companywide and included employees in Los Angeles.
“We operate in a fast changing and dynamic industry and we regularly make adjustments to ensure we are nimble and best positioned to continue investing in Univision’s growth,” the company said in a statement.
Univision also has witnessed ratings declines in its all-important prime-time programming block for its flagship Univision network. Viewers, particularly younger ones, have turned to other outlets, including archrival Telemundo, owned by NBCUniversal.
Univision also has been struggling to support its English-language Fusion TV network and digital operations, particularly after Walt Disney Co.’s ABC jettisoned its half of the joint venture this year because of ongoing financial losses. Rather than scale back its digital initiatives, Univision last summer agreed to pay $135 million to buy Gawker Media from bankruptcy court.
Univision immediately shut down the main gossip site, Gawker, because of lawsuits over its reporting. Univision kept alive Gawker’s other sites, including Deadspin, Gizmodo, Jalopnik and Jezebel — which target young adults.
In concert with the layoffs, Univision’s chief news, entertainment and digital officer, Isaac Lee, announced a restructuring in its Fusion Media Group and the formation of an investigative reporting team.
“We need to constantly make sure we have the right mix and level of talent for this journey that we are on, making sure we are being efficient and streamlined in how we manage and use all our resources and talents,” Lee said in an email to his staff.
The strained financials come as Univision has been preparing an IPO as a way to allow its private equity owners, including its billionaire corporate chairman, Haim Saban, to begin their exit from the company after 10 years. Univision initially planned to go public in the fall of 2015, but the IPO has been delayed until early next year.
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