Posted by chicagomedia.org on September 05, 2008 at 07:34:07:
In Reply to: Major layoffs coming to Metro Networks posted by chicagomedia.org on September 05, 2008 at 07:31:20:
Westwood One warns about a "re-engineering."
CEO Tom Beusse tells the organization that after seven months on the job he's got "a talented team of managers from many disciplines." But then in the third paragraph of a memo to staffers, that word "unfortunately" shows up - and that usually means somebody's going to feel pain, and it usually isn't the CEO or those new managers. Westwood One's looking to streamline the cost structure and "drive incremental revenue in the short term." They need less money going out - immediately - and more money coming in. T-R-I has been telling you about the attacks on Westwood's lucrative Shadow/Metro traffic/news division by Clear Channel Total Traffic and others, and Westwood has lost some client stations. I think it's probably about to shed some more - by choice.
Westwood clients in smaller markets may face tough choices.
Ditto for those in the suburban areas outside big metros that don't deliver much in the way of ratings. Don't be surprised if such stations face either a complete loss of service or a reduced menu. That could take the form of a pool report that's not customized. Westwood may've reached the conclusion that some stations just don't contribute to the bottom line and that it would be smart to concentrate on the ones that do. There are lots of words in the Tom Beusse memo like "refocusing" and "realigning" - and then this phrase, about the potentially "adverse effect these actions will have on some of our employees." Sounds like a warning of possible layoffs, doesn't it? Buckle up - because for this ride, employees may need more than the standard traffic update from Shadow/Metro. Stockholders have been in the pain zone for a long time - Westwood stock dropped 4 pennies yesterday to close at 72 cents. It first sank below the telltale $1 mark only about two weeks ago, and the trendline doesn't look great. I haven't heard anything further about the rumor in Tuesday's T-R-I, about Westwood being bought out. But a stock that dwells below $1 for long periods of time is going to force some unpleasant choices on management, stockholders and bondholders.
(Tom Taylor)