NBC Universal's Spanish-language television division, Telemundo, is whittling its workforce by 5%, cutting at least 85 jobs amid a slowdown in advertising.
"The broadcast business is being challenged," Telemundo President Don Browne said Thursday. "We are proactively and strategically making some adjustments to protect the larger company so that we can weather this period."
Employees at the Hialeah, Fla.-based company, owned by General Electric Co., were notified last week that they were being let go. The cuts come despite Telemundo's ratings being up about 19% in prime time compared with last season, thanks in large part to "Sin Senos No Hay Paraiso," ("Without Breasts There Is No Paradise"), a remake of a Colombian telenovela that this month has been averaging 1.9 million viewers a night. The drama tells the story of a young woman who gets breast implants to try to lift herself out of poverty.
Local TV stations, however, are in a slump with their largest advertisers -- car dealerships and retailers -- trimming ad budgets. Los Angeles and Miami, two key Latino markets for Telemundo, have been hammered. And the advertising-dependent TV economy looks to become even weaker.
"Trends continue to worsen across the media landscape, as broad-based uncertainty has advertisers reining in spending," Wachovia Capital Markets said this week in a research report. "We're seeing and hearing evidence that weakness accelerated late in third quarter."
Television companies had been hoping for an onslaught in political spending to offset lower spending from other advertisers. But so far, the two presidential nominees have concentrated their purchase of commercial time in about eight to 10 battleground states. That hasn't helped many TV station owners, including Telemundo.
Although Florida is a hotly contested state, Telemundo does not own stations in the swing regions of Tampa, Orlando and Jacksonville, where there has been more political spending. Some campaign dollars are finally flowing into Miami, however, where Telemundo owns a station, Browne said.
Last year, Telemundo experienced its most profitable year ever, earning $65 million, according to two people familiar with the company's finances. However, Telemundo will fall short of its target for 2008, earning about $40 million.
Browne would not discuss the company's finances. Telemundo, he said, has spent recent years diversifying beyond its core broadcast network by producing its own programs, selling those shows internationally and growing its youth-oriented mun2 cable channel.
"We are contracting in areas that are not growing and investing in growth areas," he said. "That should help us get through a tough time like this."
Telemundo separately confirmed that its head of programming for the last two years, Carlos Bardasano, had left his position and would not be replaced. Bardasano, who declined to comment, will serve as a consultant for the network.