Viacom-owned Showtime Networks Inc. (SNI) has laid off 70 workers, roughly 10% of its staff, on May 5, 2003, primarily in the areas of affiliate relations, marketing and creative services. This follows on the heels of rival HBO eliminating 20 jobs the previous week.
The network's programming division had to take a small hit because the license fees Showtime is now paying to program suppliers are more than double what they were a few years ago, according to a report in DAILY VARIETY. Another contributing factor is that Showtime is producing more original series and fewer features.
Industry speculation is also that the downsizing is a result of the KirchMedia crash. As the TV group shut down its operations, program producers raised license fees to U.S. cablenets to make up for lost revenues.
A Showtime spokesperson offered this prepared statement to AWN, "SNI has had tremendous subscriber growth and generated significant earnings over the past five years. After conducting a strategic review of our business, we have concluded that there are efficiencies to be gained and opportunities to streamline our organization. While this has been a very difficult decision, it has allowed us to focus our resources and organize the company for continued growth."
HBO has reoriented its affiliate-sales group's regional focus, affecting primarily middle management positions. Execs who handled regions such as Atlanta, Dallas and San Francisco are being reassigned to a specific cable or satellite affiliate.
Consolidation in the cable business prompted the cuts according to Eric Kessler, president of sales and marketing at HBO. "We have restructured our organization to reflect the ongoing changes in the industry," he said in a statement. "Specifically, we reoriented sales from a regional to an account-based focus. This enables us to service our affiliates more effectively and operate more efficiently."