How Many Bodies Exactly Is CBS Interactive Trying To Hide? Try "275-ish."

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Tiny tripods galore

The pink slips were passed out on Thursday throughout the various business duchies that make up CBS Interactive—CNET, CBS.com, CBSNews,com, CBSSports.com, BNET, GameSpot, TV.com, last.fm, and CHOW. While CBS confirmed to me and other reporters that layoffs did happen across the board, it refused to talk about how many total people are losing their jobs. That left us scrambling about gathering piecemeal information. There were about 20 layoffs at Last.fm; 8 editors, we hear, at CBSNews.com are out of a job; another set of “redundancies” were eliminated at CBSSports.com.

But how big exactly were the layoffs, especially at Cnet, where most of the employees reside? CBS, which is at heart a news organization, doesn’t want the public to know how many layoffs just occurred at CBS Interactive. As of this writing, Cnet didn’t even report the fact that there were layoffs on Thursday. Neither did CBSNews.com. And it’s not because they didn’t get the memo (from CBS Interactive CEO Quincy Smith, reprinted below).

One rumor going around, which I heard as well, was that there were 20 percent cuts in all business units (which was in line with the cuts at Last.fm). But that percentage turns out to be a bit high. According to a source inside Cnet, the buzz is that the total number of employees asked to leave today was “275-ish.” A CBS spokesperson wouldn’t confirm that number. So take it as a rough estimate.

Don’t expect a press release or even a footnote in CBS Corporation’s SEC filings either. CBS as a whole employed nearly 24,000 people at the end of 2007 (the last figure I can find), so 275 is barley one percent. That is not material, and thus the company is not required to report it. But for CBS Interactive, it is material—about 10 percent or higher.

Here’s how I get at that figure. The vast majority of employees are at Cnet, which if you look at the last 10K it filed with the SEC, lists 2,700 employees at the end of 2007. There was at least one round of layoffs at Cnet in March, 2008, which reduced headcount by 120. And a CBS Interactive spokesperson told me today that before Cnet was acquired in July, 2008, it had 2,000 to 2,500 employees. But that was more a guesstimate than a hard number. Figure some more attrition, then give or take a few hundred employees at the other CBS properties, and that puts the total employee count back somewhere between 2,300 and 2,700. Sticking with the 275 layoffs, that represents between 10 and 12 percent.

We’ve updated our Layoff Tracker with this estimate.

Below is the memo Quincy Smith sent on Thursday afternoon to all CBS Interactive employees, delivering the layoff news in the vaguest terms as part of a progress report. Basically, everywhere he is combining business units (in sports, games, music, lifestyle, entertainment, news, marketing, and biz dev), people are losing jobs.

From: Quincy and Neil
Date: Thu, 11 Dec 2008 16:33:25 -0800
Subject: CBS Interactive Update

Team,

As we come to the end of 2008, we have a lot to be proud of. CBS Interactive is the best online content network for information and entertainment. Our properties are expanding, advertisers are capitalizing on our properties and their scale, and we are positioned well to continue to grow. As we prepare for 2009 and beyond, we’d like to update you on this progress, announce some organizational changes and comment on the broader market environment and how it impacts CBS Interactive.

Progress

CBS Interactive is the 8th largest Internet network in the world. Our combined traffic is up nearly 30% since we closed the merger this summer. CNET, CBSSports.com, BNET, GameSpot, TV.com, CBS.com, last.fm, and CHOW have each had record traffic within the past three months. Our commitment to our users is paying off.

Advertisers have noticed. We have recently signed and announced deals across several of our properties with Microsoft, AT&T, Intel, Bertolli, EA, and GM. In these challenging economic times, marketers are consolidating their efforts with their best partners. Our properties, our audiences, our ideas and our insights will continue to differentiate us in the marketplace.

Finally, we have contributed to and benefited from the TV and Radio divisions of CBS. We’ve done nearly 1500 purpose-driven promotions to our properties on Broadcast TV, Radio and local TV Stations; CHOW and GameSpot content is running on the CBS Outernet; and CNET ran a major consumer campaign in markets like New York and San Francisco through CBS Outdoor. CBS Interactive is also a key partner to CBS Television Network for major broadcast events. In just the last week, we featured complementary content for events including The Victoria’s Secret Fashion Show, the Grammy Nominations and the SEC Championship.

Moving forward, we have a lot to look forward to. Events like CES, The Grammys, and March Madness on Demand are all just around the corner. Each represent huge cross-platform opportunities where CBS Interactive will again help complete the experience with coverage on air, online, and on mobile for our audiences.

Organizational Promotions and Changes

As we enter 2009, we are making some changes to our organizational structure to capitalize on audience and advertiser overlaps. We are also making some changes to key functions so that we can realize the benefits of our position in the marketplace. These changes mark another significant milestone in our integration, as we fine-tune our organization to best take advantage of the power of our entire network.

Sports, Games and Music

We are combining our Sports, Games and Music properties into a single group led by Steve Snyder. Steve has tremendous product and leadership experience and an enthusiasm for each of these categories. In addition, Tom Jones will be moving over from CNET to head-up the sales efforts for this group. Within the group, our talented senior leaders including Jason Kint, Rich Calacci, Jaci Hays, Kevin Menard, Felix Miller, Doug Schmidt and others will report to Steve and to Tom.

Entertainment & Lifestyle

We are also moving our Lifestyle properties, CHOW and UrbanBaby, to the Entertainment group (TV.com, CBS.com, The CBS Audience Network and TheInsider.com) to capitalize on the similarities in audience and advertisers. This group will continue to be led by Anthony Soohoo with sales led by Ken Lagana. We’re excited to see the innovation that will come from this group in 2009.

Technology & News

Under the continued leadership of Joe Gillespie, our Technology & News division will bring CBSNews.com and CNET News.com into a single CBS Interactive News Group. Each site will maintain its own brand identity, while benefiting from shared resources in design, product and engineering to deliver deeper and more comprehensive coverage of major stories and events. Led by Mark Larkin, with Dan Farber as Editor-in-Chief, CBS News.com and CNET News.com will also have the opportunity to share content and collaborate on stories for the benefit of their unique audiences.

CBS Interactive Marketing

We are bringing together our key marketing functions into a new group called CBS Interactive Marketing led by Mickey Wilson. The group brings together expertise from across the organization so that we can capitalize on our biggest opportunities, and elevate the company to be a strategic marketing partner whose products, consumer insights, and ad innovations are critical to our clients’ long-term success. They will establish the company as the standard for premium content online, and define and evolve brand strategies to capture the biggest opportunities for audience and revenue growth through market planning, insights and execution.

CBS Interactive Business Development

We are also bringing together all of our business development activities. This group will be led by Mike Marquez. Mike and his team will be responsible for the development of all new partnerships, investments, and acquisitions. They will be charged with taking advantage of knowledge sharing across the whole company to ensure that we are the strategic partner of choice for the industry.

Market Conditions

As you know the general economic environment continues to be a challenge. We have always been very aggressive about managing our costs, and that requirement is even more critical now than it has ever been. We believe this new, more efficient organizational structure will produce better results for CBS Interactive, and also result in lower operating costs. It is always very difficult to make these kinds of reductions, but they come after a thorough review of how we are organized and how we operate, and what best serves our many users, advertisers and employees.

CBS Interactive is a special place because of you, and we thank each of you for what you have done, are doing, and will do to exceed the expectations of the tens of millions of people who come to our properties every day.

Today, we sit in a great position. People seek out our brands because we provide them with the information and entertainment they want and need, and marketers seek us out because of the powerful audiences we attract. We are positioned to grow in 2009 and beyond.

Best,
-q, NA

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