Disney plans 5 percent job cuts at ABC division

* Lays off about 200 people at ABC
* Freezes another 200 jobs
* Reductions equivalent to 5 percent of ABC workforce

Walt Disney Co (DIS.N) plans to lay off 200 people at its ABC division, a Disney executive familiar with the situation said, underscoring the media industry's struggle with sliding ad sales.

The media giant intends to also freeze 200 vacant jobs, resulting in an overall, 5 percent reduction of Disney-ABC TV Group's workforce of about 6,500 to 7,000, said the Disney source, who declined to be identified because the cuts had not been made public.

Disney said last week it planned to combine its two ABC divisions -- ABC Entertainment and ABC Studios -- into one umbrella organization, hoping to streamline the twin business units. [ID:nN22549756]

"After months of making hard decisions across our businesses to help us adjust to a weakening economy, we're now faced with the harsh reality of having to eliminate jobs in some areas," Anne Sweeney, co-chair of Disney-Media Networks and president of Disney-ABC Television, said in a memo sent to workers and obtained by Reuters.

"This was not an easy decision, nor one made lightly. The people affected today are our friends and colleagues, and we are doing all we can for them and their families during what we know will be a difficult transition."

ESPN, the sports cable network run by Disney, also plans to cut 200 jobs from its workforce of about 5,700 worldwide, an ESPN executive told Reuters. Those cuts were announced Wednesday by ESPN and ABC Sports President George Bodenheimer in a taped address on the firm's internal Web site.

Disney, as of September, employed about 150,000 people.

Disney, which like other media firms is trying to offset declining growth in advertising revenue, has also sent voluntary buyout offers to 600 executives at its domestic theme parks, to cut costs.

Estimates made late last year called for U.S. advertising spending to drop between 5 percent and 10 percent in 2009.

Disney is the latest, but probably not the last, to announce lay offs, and may have more cuts in store as it seeks to deliver the cost reductions Chief Executive Robert Iger promised.

Time Warner Inc's (TWX.N) Warner Bros Entertainment last week announced 800 job cuts; General Electric Co's (GE.N) NBC Universal, CBS Corp (CBS.N) and Viacom Inc (VIAb.N) made job cuts last year.

News Corp NWSa.O has not announced any job cuts at its studios.

Shares of Disney closed down 4.6 percent, at $21.25, on Thursday on the New York Stock Exchange.

Source : Reuters
[tags : recession bankrupt collapse retrenchment financial news collapse stagnation economic slowdown financial collapse world recession global recession layoff job cut]