Signaling that tough times have come to the cable networks business, Scripps Networks Interactive is offering some of its employees voluntary buyouts as a way to cut costs.
The move follows a similar offer by Turner Broadcasting in August. Turner is currently in the process of eliminating 1,400 jobs.
In a memo to staff sent last week Scripps Networks CEO Ken Lowe cited a tough ad market, declining ratings, industry consolidation and greater competition as reasons for tightening belts.
“As a result, even companies out performing their peers as we are, have to change to reflect the evolving landscape,” Lowe said in the email, which was obtained by the Knoxville News Sentinel.
The cost cutting will probably go beyond the voluntary layoffs. “Each department will address its specific budget targets as they see fit. However, it is likely that this effort to bring costs in line with revenue will include the elimination of activities, projects and positions. We plan to announce any project and/or job eliminations resulting from this budget process by the end of the year,” Lowe said.
Company veterans say it is the first time in memory Scripps has had reductions across the board.
The voluntary buyouts are being offered to employees in the U.S. 55 years and older who have been with the company for 10 years or more.
Scripps Networks—which runs HGTV, Food Network, Travel Channel, DIY Network and Cooking Channel—reported second-quarter net income of $154 million, down 4%. Revenue rose 7% to $708 million.
Analysts have been looking for the company to raise the ratings of its networks, but have been troubled by increases in programming costs.
(Photo via Ervins Strauhmanis's Flickr. Image taken on Sept. 19, 2014 and used per Creative Commons 2.0 license. The photo was cropped to fit 3x4 aspect ratio.)
