Viacom’s MTV Networks will lay off 250 employees this week as the entertainment property reallocates resources toward interactive properties and new networks.
“Our industry is at an inflection point and many companies are going through the process of adapting their business models and organizations to the new realities,” MTV Networks Chief Executive Judy McGrath said in an internal memo.
She said the layoffs should be complete by the end of the week.
Count the sudden market dominance of Google’s YouTube as one of factors in the high-flying music video network’s latest cutback.
Viacom entered 2006 with a relatively competitive video-sharing platform, iFilm. According to Nielsen//NetRatings, both iFilm and YouTube had unique audiences under 5 million during January 2006. But by the last month of the year, YouTube had a audience of 38 million to iFilm’s 2.3 million.
Since then, Viacom has taken notice.
On February 2, Viacom alleged copyright infringement and demanded YouTube take down 100,000 clips, including content from MTV, Comedy Central and other networks.
At the time, Viacom said “it has become clear that YouTube is unwilling to come to a fair market agreement” on content distribution.
But a Viacom spokesperson told internetnews.com the company has also begun an internal initiative to make their own digital media properties more competitive.
He said Viacom plans to hire at least another 500 employees and spend close to $1 billion on juicing up its Internet-related businesses.