Walt Disney Co.'s ABC television division, pressured by a downturn in the economy that is depressing advertiser spending, said Thursday that it was trimming its workforce by 5%, becoming the latest media company to make cutbacks.
The Burbank-based television group said it would eliminate 400 jobs by letting go 200 employees and leaving another 200 positions unfilled. The cuts are to be spread across all of Disney's television operations, including the flagship ABC broadcast network, ABC News and the cable networks Disney Channel, ABC Family and SoapNet.
"Change is never easy and becomes even harder to embrace during times of turbulence and uncertainty," Anne Sweeney, president of the Disney/ABC Television Group, said in an e-mail to staff members. "After months of making hard decisions across our businesses to help us adjust to a weakening economy, we're now faced with the harsh reality of having to eliminate jobs in some areas."
Disney's sports network ESPN said this week that it would shed about 200 jobs this year. The Bristol, Conn.-unit also is freezing the salaries of senior executives.
The layoffs come just two weeks after Disney disclosed that it awarded Chief Executive Robert Iger $30.6 million in compensation in 2008, an increase of 11% from 2007. The boost came despite a 5.5% drop in net income during the entertainment giant's last fiscal year as consumers reined in spending, reducing profit at its theme parks as well as its television stations and networks that rely on advertising. Disney's revenue climbed 7% to $37.8 billion.
Most Disney divisions are cutting back as the economy worsens. Last week, the company offered voluntary buyout packages to about 600 executives at its domestic theme park and resort divisions. Those executives have until Feb. 6 to decide whether to leave with severance or risk becoming part of a round of layoffs.
The number of employees let go at the Disney-ABC Television Group represent less than 3% of its nearly 7,000 workers, or 5% including the vacant positions. Last November, ABC asked its show producers to trim their budgets by 2% in a bid to reduce production costs.
On Thursday, ABC News lost 37 employees out of a staff of about 1,300. The cuts were made throughout the news division, hitting the political unit, news magazines, ABC News Now and other departments. No on-air talent was fired, but those let go included production assistants and some senior producers.
ABC News President David Westin had already been keeping a tight grip on spending, paring about 35 positions annually in recent years from his division. In October, he asked news executives to fly "one grade below what they're entitled to" and to "stay in 'B' level hotels."
More cuts at ABC Entertainment are expected. Last week, ABC merged its separate network and TV production operations into one unit under ABC Entertainment President Stephen McPherson, who now must integrate and reshape the staff that oversees the production of prime-time comedies and dramas.
Media companies that depend on advertising have been slammed during the last six months. Time Warner Inc.'s Warner Bros. Entertainment eliminated about 600 people this month, and the company's AOL unit said this week that it would cut an additional 700 jobs. Radio giant Clear Channel Communications Inc. slashed 1,850 jobs.
Last month, Viacom Inc., which owns MTV Networks and Paramount Pictures, eliminated 850 positions, and NBC Universal cut several hundred jobs to save $500 million this year.
Staff writers Dawn C. Chmielewski and Matea Gold contributed to this report.