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Tuesday, 30 October, 2001, 14:07 GMT
MTV to cut workforce
Macy Gray
Macy Gray turned out to celebrate MTV's 20th birthday
US music giant MTV Networks is to shed up to a reported 9% of its workforce as the company tries to come to terms with a changing economic climate.

MTV Networks, which owns cable stations MTV, VH1 and Nickelodeon, has confirmed job losses are imminent.

Parent company Viacom has also announced losses of $190m (130m).

Viacom spokeswoman Jeanine Smartt said she did not know the exact number of MTV employees facing the axe.

Sumner Redstone
Viacom chairman chief executive Sumner Redstone had predicted an upturn in advertising
But industry newspaper Daily Variety has put the figure at about 450 workers.

A memo leaked to Reuters news agency revealed MTV Networks was undergoing a radical shake-up of operations to steer it through difficult trading conditions.

Part of the restructuring would see its online operations being absorbed into its main business and moving out of its dedicated Manhattan offices, according to the memo.

Slump

There is also expected to be considerable restructuring at Nickelodeon and VH1.

MTV Network chief executive Tom Freston also spoke of consolidating its once separate MTV and Nickelodeon Latin American organisations.

Viacom's drop in profits is being blamed on a slump in radio and television advertising in the wake of the events of 11 September.

As the events unfolded its news channel CBS scrapped all its scheduled advertising for four days as it ran a rolling news programme.

DVD market

It also had to reschedule or cancel programming for the usually lucrative fall season.

Fatboy Slim
Fatboy Slim is always an MTV favourite
Earnings at Viacom's television businesses in the third quarter fell by 17%.

In addition to the CBS network, the division also includes the UPN network and 34 television stations.

Losses are also being attributed to the $356m (251m) decision to begin eliminating VHS videos from its Blockbuster chain in favour of the higher profit DVD market.

In total third-quarter revenues fell 2% to $5.7bn (3.92bn) from $5.8bn (3.98bn).

In June, Viacom's chairman and chief executive, Sumner Redstone, wrongly predicted advertising would see an upturn by the end of the year.

See also:

25 Jun 01 | Business
ITV loses 'licence to print money'
08 Sep 99 | The Company File
CBS and Viacom: Media giants marry
21 Jun 01 | Business
Advertisers seek optimism in Cannes
13 Jun 01 | Business
Granada reveals 10% ad slump
29 Jun 01 | Business
Viacom upbeat on ad outlook
11 Jun 01 | TV and Radio
ITV's 'dramatic ad slump'
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