UPDATE 2-Disney's ABC TV unit to lay off 2 pct of staff -source

Wed Aug 21, 2013 3:36pm EDT

By Lisa Richwine

LOS ANGELES Aug 21 (Reuters) - Walt Disney Co on Wednesday will begin laying off about 175 people in its Disney/ABC television group, about 2 percent of the unit's workforce, to adjust to changes in technology and viewing habits, a person familiar with the decision said.

The layoffs in the Disney/ABC Television Group, which does not include the ESPN cable sports operations, came after a company-wide review to explore cutbacks in jobs Disney no longer needs, either because of improvements in technology or redundancies following a string of major acquisitions in the past few years. Reuters first reported on the internal review in January.

The new layoffs will occur across the group, which includes the ABC broadcast network as well as the Disney and ABC Family cable channels, the source said. Most of the cuts will come in technical operations, such as broadcast engineering, and at eight ABC-owned stations across the United States.

An ABC statement did not confirm the numbers of job cuts but said the unit, which employs about 7,600 people, had reviewed its businesses and decided to restructure.

"As technological advances continue to alter the competitive landscape and viewer habits, it's incumbent upon us to stay ahead of the curve," an ABC spokesman said in the statement.

Other jobs may become available as Disney focuses on new technologies such as its Watch ABC app, which offers live streaming of the network's programming on mobile devices, the source said.

The company employed a similar restructuring strategy in 2010 at ABC News that strengthened that unit, the source said. The news division cut 400 jobs at the time, allowing it to shift focus and hire new people with different skills in growth areas.

This year, Disney in April cut 150 jobs at its movie studio, 150 at its newly acquired Lucasfilm unit, and an undisclosed number in its consumer products division, sources told Reuters. Its ESPN sports network began eliminating 300 to 400 jobs in May, but a source said at the time that those cutbacks were unrelated to the broader review.

Disney reported $1.85 billion in net income for the quarter that ended in June, a 1 percent gain from a year earlier. Operating income at media networks, the company's largest unit which includes cable channels and ABC, rose 8 percent.

Cable channels accounted for a 12 percent gain in quarterly operating income. At the ABC broadcast unit, operating income declined 21 percent due to higher prime time programming costs, lower program sales and decreased advertising revenue, the company said.

ABC's prime time ratings for the season that ended in May ranked fourth among the broadcast networks for 18- to 49-year-olds, the key group for advertisers, and second in total viewers, according to Nielsen.

Disney shares have climbed 23 percent this year as the company has posted strong overall results overall lifted by media networks and theme parks. On Wednesday, Disney shares fell 0.3 percent to $61.61 in afternoon trading on the New York Stock Exchange.

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.