Viacom Cuts 850 Jobs, Takes Write-Down

In strong evidence that content giants are not immune to a badly battered economy, Viacom Inc. (VIA-B) has announced plans to cut 850 positions, take a hefty write-down, and reorganize in what it terms as cost-savings initiatives.

The diversified entertainment superpower consists of BET Networks, MTV Networks and Paramount Pictures, with brands, including MTV, VH1, CMT, Logo, Rock Band, Nickelodeon, Noggin, Nick at Nite, AddictingGames, Neopets, COMEDY CENTRAL and Spike TV.

Viacom has roughly 160 channels and 400 online properties in 160 countries and territories.

The restructuring and write-down together will result in a pre-tax charge of $400 million to $450 million, or $0.42 to $0.48 per diluted share, in the fourth quarter of 2008, the company said. These staffing and compensation actions and write-downs are expected to result in pre-tax savings of $200 million to $250 million in 2009.

Viacom President and CEO Philippe Dauman said, in prepared comments: “We are moving rapidly to adapt to the challenges presented by the current economic environment. The changes we are making in our organization and processes will better position Viacom to navigate the economic slowdown and generate sizable efficiencies that will help us to drive our business as the marketplace stabilizes and conditions improve.”

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