ESPN Begins Major Layoffs
ESPN is laying off a large number of employees, but won't say how many. The sports site Deadspin reported the layoffs to be in the hundreds.
An insider at ESPN told TheWrap that Deadspin's early report of more than 400 people being let go was "wrong and high." The source said the cuts would come from existing jobs and from not filling open jobs.
Deadspin also cited an ESPN source who said the early 400-plus estimate was high.
"We are implementing changes across the company to enhance our continued growth while smartly managing costs. While difficult, we are confident that it will make us more competitive, innovative and productive," ESPN said in a statement.
The company, based in Bristol, Conn., has 4,000 U.S. employees and 3,000 in the rest of the world. The company is 80 percent owned by Disney, through ABC, and is 20 percent owned by Hearst Corp.
The layoffs come as ESPN's costs have gone up in part because of increasing rights fees and as Disney looks for ways to increase efficiency overall.
ESPN is looking to cut costs not tied to future growth. But it still plans to hire people in other areas, including at its recently announced SEC network.
Disney recently reported a 10 percent jump in quarterly revenues and a 36 percent hike in profits for the first three months of the year, with growth in ESPN's affiliate revenues and advertising revenues helping to off-set sluggishness at ABC.
Disney's cable revenues jumped 9 percent to nearly $3.5 billion, while operating income rose 15 percent to $1.7 billion.
In November, Forbes declared ESPN "the world's most valuable media property" after research firm Wunderlick Securities estimated its value at $40 billion.
But that hasn't kept ESPN from being cost-conscious. According to what Deadspin said was an internal memo last month, operations manager Severn Sandt asked employees covering the X Games in Brazil not to seek overtime for working a little late, and invited them to work an hour or so for free. It also asked them not to take free water bottles home from work.