VIACOM BLOODBATH

By PETER LAURIA
The New York Post

DAUMAN TRIPLES ESTIMATE, FIRES 850+ IN ALL DIVISIONS

The sheer size of the bloodletting that went down at Viacom yesterday has current and now-former employees referring to CEO Philippe Dauman alternately as "the undertaker" and "the mortician" around the company's water coolers.

Initially expected to total around 300 people, Dauman nearly tripled that number by announcing that Viacom would cut 850 jobs, or about 7 percent of its workforce. The company also said that it is suspending salary increases in 2009 for senior-level executives.

"The only time people hear from Philippe is when he's firing them," said one former executive, who asked to remain anonymous because he still maintains close ties to the company.

Sources expressed particular umbrage at the letter Dauman sent to staffers yesterday announcing the layoffs. In the letter, Dauman says he "couldn't be more proud or more appreciative" of Viacom's employees and that "saying goodbye to friends and colleagues is always difficult."

But coming in the context of massive layoffs, several staffers agreed with one source, who found the letter "totally offensive."

However, Dauman does have supporters in the company. One source, disputing the idea that Dauman is only heard from when it's bad news, said, "Dauman's always been available to speak at conferences or meet with clients whenever needed."

Viacom said the 850 job cuts will be carried out across the company's various divisions, but didn't provide a precise number for each unit. Sources said movie studio Paramount will lose about 100 employees and the MTV Networks group, which includes MTV, VH1, Nickelodeon and Comedy Central, would shed as many as 500 people.

At MTV Networks, sources said the advertising sales division would be hit particularly hard, which is ironic since advertising at Viacom's channels is trending below that of its peers.

Digital ad sales, which is supposed to be a growth area for Viacom, is expected to lose a few dozen people. And the former Viacom executive said the rumor going around is that digital media chief Mika Salmi might leave the company by the end of the year.

The layoffs, combined with the writedown of certain programming and other assets, will result in a pre-tax charge of $400 million to $450 million, or 42 cents to 48 cents per share, in the fourth quarter. But, the company expects to save between $200 million and $250 million next year as a result of the moves.

Viacom's layoffs are independent of the debt issues faced at Chairman Sumner Redstone's National Amusements. Redstone's next move may be to sell his stake in slot-machine company WMS Industries or part of the National Amusements movie theater chain.

Viacom shares closed trading yesterday up 13 cents to $14.63.