Viacom CEO Philippe Dauman hinted at looming layoffs at his company during a Thursday morning investors call. On Friday, the company president’s comments were confirmed to TheWrap as a warning for job-cutting in the near-to-intermediate future.
Viacom will “pull all the levers” for this cost-saving measure, including but not limited to employee layoffs, a person with knowledge of the situation told TheWrap.
On Thursday Dauman told investors to expect “substantial net cost savings throughout our organization” as the company goes through “organizational realignment.”
Layoffs are not the only cost-savings on deck in the restructuring, said the knowledgeable individual. The plan may include “writing down programming,” though it will not result in an actual production reduction.
While there are no details yet, it is possible that primarily repeat programming — which cannot be monetized as well as in years past — will be written off, the person said. Current programming is a little more up in the air.
It is reasonable to assume the layoffs will come within the next three months, which explains why Dauman warned the market on the quarterly earnings call. For now, the company has to look into functions — which it has yet to do, we’re told — therefore while it has a dollar amount it mind, Viacom is still in planning mode on how to achieve its monetary goal.
The company’s top exec — who recently has his contract extended through 2018 — hauled in $44.3 million in 2014, an increase of $7.1 million. Viacom founder Sumner Redstone’s total compensation dropped from $36.2 million (2013) to $13.2 million (2014).
Viacom missed Wall Street’s revenue expectations for its most-recent three-month quarter, largely due to a decline in U.S. TV ad sales thanks to slipping ratings. The company’s earnings per share were as expected. Viacom was up in both metrics year-over-year.
Company stock (VIAB) has been trading down all day on Friday, closing down $3.07 per share (minus 4.55 percent) to $64.42.
Here are the layoff hints from Dauman on Thursday’s investors and reporters call:
We are rapidly adapting our processes and business as well as human, financial and technological resources to increase focus on new high potential areas…It is clear that this transition will require some organizational realignment, as well as rationalization of content that no longer meets our goals.
We have identified specific areas where we can work more efficiently while focusing better on the evolving needs of our customers and audience. These changes are well underway and will result in substantial net cost savings throughout our organization while at the same time increasing our focus and investment in areas with the highest growth potential.
We expect to have more news about these ongoing efforts in the months ahead.