PEACOCK PLUCKED NBC UNIVERSAL TO CUT 700 JOBS MEDIA GIANT PLANS TO PUT SAVINGS INTO DIGITAL TECHNOLOGIES.

Byline: GREG HERNANDEZ Staff Writer

NBC Universal told the world Thursday that it is investing heavily in a digital future, but about 700 of its employees won't be around for it.

The media company, headquartered in Burbank, made a series of announcements in New York outlining a major reorganization that includes plans to slash $750 million in annual expenses and eliminate all scripted shows from the 8 p.m. time slot in favor of cheaper-to-produce game shows and reality programs.

NBC Universal, which will consolidate many of its operations on both coasts, will reinvest the savings in digital technologies. The company said it expects its digital revenues to exceed $1 billion by 2009 from such things as original broadband channels, various interactive Web sites, and the delivery of television shows and movies to online and wireless devices.

``... There is no better time to re-engineer the company for the revolutionary changes to come,'' said Jeff Zucker, chief executive of NBC Universal's television group. ``We have to recognize that the changes of the next five years will dwarf the changes of the last 50.''

Zucker said the initiative, called ``NBCU 2.0,'' will prepare the company for future growth from a position of strength.

The reorganization and the elimination of approximately 5 percent of NBC Universal's work force will result in the consolidation of news facilities in Burbank, where such operations as the NBC and Telemundo networks, KNBC, KVEA and KWHY are located. But exactly how many jobs will be impacted locally is not yet known since the cutbacks are expected to take place over the next two years, a local representative said.

Cable news channel MSNBC will lose its facility in Secaucus, N.J., and move into NBC News headquarters in Manhattan's Rockefeller Center, as well as another location in New Jersey where its CNBC studios are already located.

Strategic change

Details of the cutbacks came as NBC Universal Chairman and CEO Bob Wright announced the ``NBCU 2.0'' initiative, which executives said will step up efforts to transition from analog to digital broadcasting for high-definition televisions and cutting-edge technology such as the video iPod introduced by Apple earlier this year.

``Success in this business means quickly adjusting to and anticipating change,'' Wright said in a statement. ``This initiative is designed to help us exploit technology and focus our resources, as we continue our transformation into a digital media company for the 21st century.''

Part of its savings plan calls for replacing dramas and sitcoms with inexpensive game shows such as ``Deal or No Deal'' and reality programs in its 8-9 p.m. slot.

``It's a risky strategy because, in a sense, you're limiting your programming genres and thus some of the potential available audience,'' said John Rash, senior vice president and director of media negotiations of Minneapolis-based ad agency Campbell Mithun.

``As a genre, (game shows) wax and wane based on originality and audience appetite which has been whetted once again with `Deal or No Deal.' All the networks run a risk rushing in with too many of them. There's a cautionary tale from `Who Wants to be a Millionaire.'''

In the late '90s, ABC saturated its prime-time schedule with multiple editions of ``Millionaire,'' which initially pulled in huge ratings. But when its viewership began to collapse, so did ABC's prime-time schedule and it wasn't until the fall of 2004, with the breakout hits ``Desperate Housewives'' and ``Lost,'' that the network was able to begin its recovery.

In last place

NBC, which once dominated prime-time ratings with such hits as ``Friends,'' ``Seinfeld,'' ``Will & Grace'' and ``ER,'' has fallen to last place among the four major networks. It has suffered through a string of high-profile failures including ``Joey,'' ``Law & Order: Trial By Jury,'' ``Inconceivable'' and ``Kidnapped.''

The current season has no shows ranked in the top 10 and includes only one breakout hit: the drama ``Heroes.'' The network has also benefited from strong ratings for its new ``Sunday Night Football'' and from rising numbers for comedies ``The Office'' and ``My Name is Earl.''

``They needed to take dramatic action,'' said Bill Carroll, vice president and director of programming at Katz Television Group. ``I think the economics of their current circumstance, which is really brought on by the lack of rating success in prime time and the fact that MSNBC continues to lag behind the other cable news networks, they either had to eliminate people or close down operations.

``They are faced with, as any large corporation, having to take affirmative action for their stockholders and Wall Street.''

Universal Studios, which has not seen a stellar year at the box office, isn't looking at any layoffs yet. President and Chief Operating Officer Ron Meyer said in a statement that domestic theatrical, home entertainment and television marketing and distribution divisions will save money by consolidating positions and maximizing efficiencies.

``As a business, we are continually looking to be smarter about how we develop, distribute and market our films around the world,'' Meyer said.

Business as usual

They will also consolidate locations, support functions and marketing at the following divisions: Universal Pictures International, Universal Pictures International Entertainment and NBC Universal International Television Distribution.

Cutbacks and layoffs are nothing new for the entertainment behemoths in Burbank. In July, The Walt Disney Co. eliminated 650 jobs from its movie division, half of them international positions. The studio also reduced its feature-film slate from 18 releases per year to about a dozen.

Last November, more than 300 employees at Warner Bros. Entertainment were given pink slips in an effort to reduce costs. The layoffs affected all divisions including feature films, home video, television, consumer products and corporate.

At the NBC Studios in Burbank, it was business as usual with employees declining to comment but looking no worse for the wear and fans waiting in line to get into ``The Tonight Show with Jay Leno.''

Said one woman: ``I'm going to kill Jay (Leno) if he gets laid off!''

Staff Writer Eugene Tong contributed to this story.

greg.hernandez(at)dailynews.com

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CAPTION(S):

3 photos

Photo:

(1 -- color) no caption (NBC)

(2 -- color) no caption (Universal Studios)

(3) Visitors pass in front of the entrance of ``The Tonight Show with Jay Leno'' as NBC announced the layoffs of 700 employees Thursday. The media company announced it will reinvest the savings into digital technologies, including new Web sites.

John Lazar/Staff Photographer