TOPICS > Nation

NBC, CNN Plan Staff Cuts

BY Admin  January 15, 2001 at 12:00 PM EDT

NBC, owned by General Electric, has been under a hiring freeze since October and said it hopes to complete its staff reduction by March.

The cuts, affecting up to 10 percent of the company’s 5,600 staffers, are expected to come from every NBC unit and division, including entertainment, news and cable networks CNBC and MSNBC.

“It is no secret that the current economic climate is affecting our business,” chairman Robert Wright said in a memo to employees Friday. “It is now clear that we must go beyond belt-tightening and take the additional step of reducing the size of our work force.”

But some analysts say the network is suffering from more than just a waning marketplace. ABC, owned by the Walt Disney Co., and CBS, owned by Viacom, can more easily develop their own series and specials though company-owned production studios. Meanwhile, NBC is stuck with hefty price tags for many of its hit primetime series.

“NBC lacks big revenue streams from syndication, it must pay through the nose to buy movies, and it lacks a dynamic reality show,” James Kelleher, an analyst for Argus Research, told The New York Times.

Although the network hasn’t had a ratings-grabbing breakout program among this season’s new offerings, standard-bearers like “Friends,” “E.R.” and “Frazier” have remained strong sources of advertising dollars.

But that kind of reliability comes at a cost. NBC doles out $13 million per episode for “E.R.” and $6 million an episode for “Friends.” And starting next year, according to The Washington Post, the peacock network could pay as much as 7 million a pop for “Frazier.”

The last major staff cut at NBC came in 1998, affecting 250 employees.

CNN layoffs expected

NBC’s announcement comes as CNN, owned by the newly merged AOL Time Warner, is reportedly contemplating its own sizable staff cuts affecting as many as 1,000 employees.

The Wall Street Journal reported last week that insiders were unsure when the layoffs would begin and how they’d be distributed, but deep cuts were expected in the company’s Web division.

If the layoffs are as large as expected, they could be the biggest in the network’s 20-year history.

CNN employs 4,300 people worldwide, 2,800 of which are based at its Atlanta headquarters.

A network source told the Associated Press an announcement could come as early as this week.