Viacom cuts 850 jobs

Viacom is to cut seven per cent of its workforce as part of a major global restructuring.

850 jobs have gone at the firm, which is the parent company to the likes of MTV Networks, Nickelodeon, Dreamworks Animation and Paramount Pictures.

Its subsidiaries have been enjoying an increasingly close relationship with games, from MTV’s ownership of Rock Band developer Harmonix to Nickelodeon and Dreamworks licensing franchises to major games publishers such as THQ and Activision.

Another Viacom company, Paramount Pictures, has announced that it wishes to self-publish titles in future.

Viacom will cut jobs in all divisions of the company, which will result in the reduction of its workforce by approximately 850 posts.

The company also said it was suspending senior level management salary increases for 2009.

The restructuring and write-downs together will result in a pre-tax charge of between $400m (273m) and $450m (307m) in its fourth quarter this year.

However, the cutbacks are expected to improve profitability, resulting in pre-tax savings of between $200m (137m) and $250m (170m) in 2009.

Viacom said the plan was designed to better align its costs with what it termed "evolving economic conditions".

Viacom president and chief executive Philippe Dauman said: "We are moving rapidly to adapt to the challenges presented by the current economic environment.

"We are committed to continuing this prudent course and aggressively managing our businesses for long-term growth."

Viacom’s majority shareholder Sumner Redstone has been attempting to restructure $1.6bn (1.1bn) of debt. This week, he offloaded his controlling stake in Midway Games.

Redstone has to refinance $800m (545m) of his $1.6bn of debts at National Amusements, his private holding company, before the end of the year.