MUMBAI: Broadcasting company Clear Channel Communications on Tuesday cut 1,850 jobs, or about nine per cent of its total work force, according to a memo Chief Executive Officer Mark Mays sent to employees.
A significant portion… of the cuts come as the San Antonio-based company realigns its ad-sales department in response to the weak economy, Mays said. However, they span all departments in its corporate, radio and outdoor advertising divisions.
The cuts at the group will save the company about $350m, Mark Mays, chief executive of Clear Channel, told the Financial Times, and come as the economic downturn has exacerbated a steep fall in advertising.
Most of the cuts would be in the radio sales department, but the company said the restructuring had affected corporate, outdoor and the Premiere radio network, which syndicates shows including The Rush Limbaugh Show.
Like most companies that rely on advertising, radio companies have suffered steep drops in ad revenue, which accelerated in the last few months of the year.
Revenues in the radio sector fell about nine per cent in 2008. The Radio Advertising Bureau reported that, in November, local and national radio advertising fell 20 per cent and 24 per cent, respectively.
The radio sector’s anticipated declines in 2009 will outpace the general advertising market, according to Barclays’ estimates Total US advertising is expected to drop 10 per cent, while radio revenue is anticipated to fall 13 per cent in 2009.
The contraction in the market had afforded Clear Channel, which owns 850 radio stations, compared with 1,200 a few years ago, an opportunity to reengineer… its operations, Mays said.
We have no room for low performers in either radio or outdoor,… he said. There is nowhere to hide for low performers and that includes programming….
Mays denied recent reports the company sought to rely more heavily on syndicated programming at the expense of local programming, addressing a recurring criticism that the radio conglomerate aimed to homogenize programming across markets.
Instead, Clear Channel examined its approach on a market-by-market basis, he said Clear Channel also owns stakes in radio groups in Australia, Mexico and New Zealand.