Viacom troubles reach breaking point

By: Allison McNeal

Companies such as AT&T Inc., Credit Suisse Group AG, DuPont Co., and Viacom announced job cuts today as the U.S. recession threatens to become the longest in the postwar era.

Viacom Inc., owner of MTV networks and Paramount Pictures, recently stated that it plans on cutting more than 850 jobs, which is about seven percent of the workforce, because of lack of viewership and falling ad sales.

Chief executive Philippe Dauman said that the staff reduction “will better position Viacom to navigate the economic slowdown.”

Last month, Viacom reported a 37 percent drop in third-quarter profit as ad sales declined for the U.S. cable channels.

This quarter MTV’s viewership has declined 22 percent, which is the most of any Viacom network. Compared to a year ago, shows like “The Hills” and “A Shot at Love with Tila Tequila” attracted bigger audiences, Spencer Wang, an analyst at Credit Suisse, said.

While these shows are still being viewed, individuals are not watching them to the extent that they have when they were first broadcast.

In addition to the job cuts, the company is also suspending senior-level management salary increases for 2009.

With job cuts that are now becoming imminent, organizations are growing weary.

According to Dauman and Chief Financial Officer Tom Dooley, Viacom needs “an organization and a cost structure that are in step with the evolving economic environment."