NBCUniversal has started to lay off employees as it seeks to stem the financial toll of the coronavirus while positioning itself for a broader transition toward streaming entertainment, a person familiar with the company’s plans said Tuesday.
The cuts will affect less than 10 percent of NBCUniversal’s overall workforce of 35,000 employees, according to the person, who asked not to be identified, lacking authorization to speak publicly.
The layoffs will be company wide, hitting broadcast and cable networks, as well as the movie studio and theme parks.
NBCUniversal is the parent company of NBC News.
The cuts come as major media companies face severe revenue declines tied to the pandemic. Disney has already implemented staff cuts, and WarnerMedia is expected to start cuts later this month, according to a report from The Wall Street Journal,which first reported the layoffs.
Hilary Smith, executive vice president of corporate communications for NBCUniversal, declined to comment.
Companies like NBCUniversal and Disney that have major theme park businesses have been especially hard-hit. NBCUniversal, which is owned by Comcast, reported a 25 percent decline in revenue for the second quarter. Disney said it took a $1.4 billion hit due to coronavirus-related expenses. NBCU also implemented a pay cut for senior managers and some well-compensated employees in May.
At the same time, NBCUniversal is in the middle of a reorganization following the appointment of Chief Executive Jeff Shell earlier this year. That reorganization will focus heavily on supporting the company’s streaming operations, including its new platform Peacock, which formally launched last month.
“It is said that crises tend to accelerate and exacerbate trends that are already happening,” Shell said during Comcast’s earnings call last week. “That is certainly true in the television business, where viewership is rapidly shifting from linear to nonlinear.” Linear is a term used in the entertainment industry to describe the viewing experience of traditional TV.
One of Shell’s first moves as CEO was to appoint Mark Lazarus to chairman of television and streaming, where he is overseeing an effort to integrate NBCUniversal’s various media and entertainment units.
“A few months ago, we combined our television and streaming businesses under Mark Lazarus, which will allow us to more rapidly shift our resources and investment from linear to streaming,” Shell said on the earnings call. “Mark is finalizing a new structure that will demonstrate the unique way we intend to manage this business going forward.”
Shell has also put the company’s three news units — NBC News, MSNBC and CNBC — under the leadership of one executive, Cesar Conde, a move that points to a further integration of those three units down the line