Viacom has announced a major restructuring across its entire global business, which including MTV Networks and Paramount Pictures. It will cut jobs in all divisions of the company, which will result in the reduction of its workforce by approximately 850 posts or 7% of the staff. The company is also suspending senior level management salary increases for 2009. In addition, the company will write down certain programming and other assets.
The restructuring and write-downs together will result in a pre-tax charge of between $400m and $450m in the fourth quarter of this year. However, the cutbacks are expected to improve profitability, resulting in pre-tax savings of between $200m and $250m in 2009.
Viacom said the plan was designed to better align its costs with what it termed “evolving economic conditions”.