Westwood One's Reorganization Explained In Detail
September 19, 2008 at 5:00 AM (PT)
WESTWOOD ONE Pres.CEO TOM BEUSSE and CFO ROD SHERWOOD held a public conference YESTERDAY (9/18) to follow up on last weeks cuts and restructuring.
Last FRIDAY (9/12) the company announced they would be cutting METRO's staff by 15% in fourth quarter and consolidating operations into 13 regional hubs using digital "cellular probe technology" by the end of second quarter 2009 (NET NEWS 9/12). Local traffic updates will continue to be delivered to all of its current markets from the 13 hubs. The company will take a restructuring charge of $20-$24 million for third quarter, and expects to achieve cost savings of $25-$30 million from the cutbacks and hub consolidation.
Some additional details were unveiled, with SHERWOOD explaining the move from 60 regional facilities to 13 hub markets "more fully leverages our new digital technologies." The 4th Quarter of this year will see 18 office moves, with the remainder to be completed in the middle of next year.
The sales force will be impacted as well, with WESTWOOD ONE adding regional managers in eight hubs. Currently the sales staff is managed from NEW YORK. BEUSSE added the sales staff are being trained on all of WESTWOOD ONE's assets and asked to sell more of that base, saying "It's more sophistication, more locally, and better efficient use of 135 sellers, which should be a monster sales force, but has been a very small sales force based on the way we've deployed it."
YESTERDAY (9/18), the NEW YORK STOCK EXCHANGE notified WESTWOOD ONE that the company had fallen below the NYSE's continued listing standard (NET NEWS 9/18), relating to a minimum share price of $1 during a consecutive 30-day trading period.