Media giant 21st Century Fox is looking to cut spending on film and television staff by $250 million this year through buyouts. The voluntary buyout program will impact employees at Fox Networks Group and 20th Century Fox film studio.
Fox Networks Group CEO Peter Rice and 20th Century Fox Film CEO Jim Gianopulos announced the buyouts in separate emails to staff.
One Fox employee told TheWrap that the buyout is not being initiated with a specific headcount number in mind. Everyone who leaves the company will leave in late May. Only U.S. employees will be eligible for a buyout.
Fox’s television business is more heavily staffed than its film business is, so presumably more buyouts could come from the TV side.
“As we position 21CF for the future, we want to ensure our organization remains agile and structured to fully capture the many opportunities ahead of us,” the company said in a statement. “With this we are looking across our film and television businesses to transform certain functions and to reduce costs. As part of this process, which is in its early stages, today some colleagues from Fox Networks Group and 20th Century Fox will be offered a generous benefit package if they opt to voluntarily leave the Company.”
James Murdoch is CEO of 21st Century Fox and serves as co-chairman of the company with his brother Lachlan.
Fox reported lower-than-expected earnings in November for the the first fiscal quarter of 2016. The poor box-office performance of the film studio’s “Fantastic Four” reboot had been blamed for the underperformance.
For the same period, Fox’s television earnings were flat when compared to a year earlier.
Fox Broadcasting went through an executive transition in 2014, when oversight of the network was given to 2oth Century Fox Television studio chiefs Gary Newman and Dana Walden. Long the top-rated network in broadcast, Fox had seen its ratings decline more than its competitors’ as “American Idol” began to fade in popularity.
Since that transition, Fox has seen outsize ratings for new shows such as “Empire” and its “X-Files” revival miniseries.
News of the buyout program came as the network was celebrating its ratings victory with “Grease: Live,” a project nearly two years in the works, produced with Paramount Television. The live musical drew 12.2 million total viewers Sunday night, according to Nielsen live-plus-same day numbers.
Read the full letters from Rice and Gianopulos below.
Our industry is changing rapidly, presenting new challenges and even more opportunities at every turn. For a company that has always embraced change and innovation, these are exciting times. To ensure we make the most of this new world, we need to adjust, adapt, and organize for the future. With this in mind, through the remainder of this fiscal year, we will be undertaking some structural changes, increasing investment in some parts of the company while making cost reductions in other areas.
During the past 18 months, we have aligned our company around our core consumer-facing brands: reorganizing Fox Sports; expanding FX Networks; bringing together Twentieth Century Fox Television and FBC; uniting our ad sales teams into a leaner and more agile operation; purchasing True X; creating the new National Geographic Partners; and, most recently, restructuring our international channels to capitalize on our expertise in major regions.
As the next step in this reorganization, colleagues who fit a specific set of criteria will be offered a generous benefit package if they decide to voluntarily resign from the company, effective May 23, 2016. Colleagues who are eligible for this offer will receive a confidential email in the next few hours with specific terms and benefits. Again, the program is completely voluntary.
This restructuring is coming at a time when all of our businesses are hitting new heights, which I know may be confusing. Last night’s Grease: Live on FOX was a groundbreaking and spectacular production. The premiere of the X-Files, made by Twentieth Century Fox Television for FBC, was watched by a global audience of more than 50 million people. Fox Sports is home to many of the world’s biggest sporting events including last week’s NFC Championship game, this month’s Daytona 500, the next World Cup and next year’s Super Bowl. American Crime Story, which is produced by Fox 21 Television Studios and FX Productions and premieres on FX tomorrow, is one of the year’s most anticipated new series. Our new partnership with National Geographic has made us the world leader in visual factual entertainment across all platforms. These are just a few of the highlights across our business that, when taken together, make this an incredibly exciting creative time at the company. It is important, however, that we organize ourselves for tomorrow rather than resting on the laurels of today, and the best time to do that is when we are in a position of strength.
I realize change is difficult, but we will be stronger if we take this opportunity to position our organization for the future. This is the right thing to do for our business because although technology is rapidly changing our world, the global hunger for our brands and content will continue unabated and making the right decisions now will provide our company with many exciting opportunities for continued growth and success. I thank you all in advance for your professionalism and support.
As we all know, the film industry is facing many significant changes, and we are no exception. While we continue to succeed on many fronts, such as garnering an extraordinary 30 Academy Awards nominations and; last year, setting an all-time industry box office record, we must be cognizant of the industry’s transformation and position ourselves to continue our success in this new environment. To that end, we are reviewing our organizational structure and looking at potential cost reductions to position us for sustained future growth.
As we embark on this review, we are taking the opportunity to offer 20th Century Fox colleagues who have extended tenure an enhanced benefit package if they elect to voluntarily resign from the company effective at the end of May 2016. Colleagues who are eligible for this program will receive a confidential email with the details of the offer. The program is completely voluntary, and these offers are being made to recognize the significant contributions our colleagues have made during their time at the studio.
This comes at a time that is both exciting and challenging for the company. We are the best at what we do and will continue to excel, but we also have to be fearless about transforming, and embrace both change and opportunity. If we structure our organization for the media world ahead of us, we will continue to thrive and make 20th Century Fox a stronger and more agile company going forward.
Thank you for your continued contribution and dedication.
Tony Maglio contributed to this report.