CBS Cutbacks Expected to Include 400 Layoffs : Television: The network has been hit by recession, costs of war coverage, losses on sports coverage and low ratings.


CBS Inc., hit by an industrywide recession plus the costs of covering the Persian Gulf War, is expected to lay off more than 400 employees over the next several months, executives said Friday.

The layoffs come at a time when the television networks are facing one of their worst years in history due to a sharp drop in advertising revenues and the costs of war coverage.

But CBS has been harder hit than the other networks because of losses associated with baseball and basketball programming as well as its third-place standing in prime time. The network lost $92 million last year on baseball and expects to lose another $190 million over the remaining three years of the contract.

CBS senior management had been meeting this week with consultants McKinsey & Co. at a Westchester County, N.Y., resort to review budget-cutting proposals to be presented to CBS Inc. Chairman Laurence A. Tisch.

Sources familiar with the proposals said the overall plan calls for CBS Inc. to cut its 1991-92 budget by more than $200 million, or 6%. At least 400 employees would lose their jobs over the next several months, executives said.


Layoffs are expected to occur in all divisions, including news, entertainment, sports and the company’s television and radio stations. CBS News, which employs 1,050 people, would lose about 100 jobs. CBS Inc. has 6,650 employees.

Budget cutbacks have become almost a way of life at the networks since they all came under cost-conscious owners in the mid-1980s. NBC closed its San Francisco news bureau two weeks ago, and late last year ABC shut down bureaus in Chicago, Boston and Dallas.

Such closings, however, are expected to pale next to the pending round of budget and staff cutbacks at all three networks, which are painfully adjusting to the new realities of the television marketplace.

Network revenues--as well as costs--grew at double-digit rates all through the 1970s and into the early 1980s. But in recent years, the growth of cable and the Fox network has siphoned off both advertising and viewers while costs have continued to climb.

NBC, which has 5,700 employees, is moving forward with more than $50 million in budget cutbacks that will include at least 8% in staff reductions over the course of the year.

ABC on Wednesday said the combination of war and recession would have a “significant negative impact” on its first-quarter results, adding, “There is every indication that the soft revenue environment will persist through at least the first half of 1991.”

That followed the disclosure CBS made last week that it expects operating income to “decline significantly” below the $85.3 million it earned in the first quarter of 1990. CBS had previously acknowledged that its TV network would lose money this year.

CBS employees noted with irony that senior management was mapping out the staff layoffs and budget cutbacks at the exclusive Trout Beck conference center in Amenia, N.Y., where the approximately 25 executives had the entire 440-acre estate to themselves and rooms cost $275 per night.