News hews 50 in reorg of DirecTV


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Jan 24, 2004
Sun Feb 1, 7:00 PM ET


(Variety) The reorganization and consolidation of Hughes and DirecTV under the watchful eye of new owner News Corp. has begun, with Hughes on Friday announcing the elimination of 50 positions at the El Segundo, Calif.-headquarters.

Most of those positions are in finance, human resources and communications. Another 30 corporate staffers will be reassigned to the DirecTV operations in either El Segundo or New York, where a small corporate headquarters staff will be located alongside new Hughes prexy and CEO Chase Carey and DirecTV chief Mitch Stern.

Cuts are just part of an aggressive campaign to improve profitability and growth at the satcaster. News believes it can find up to $735 million in cost saving synergies in its first three years at the helm of the satellite operation.

Company said departing employees are entitled to a severance package and outplacement services. Hughes CFO Mike Gains already left early last week.

In addition to the announced layoffs, several top DirecTV execs have also been shown the exit, including Dave Baylor, head of technology and broadcast operations, general counsel Rob Hall, customer service chief Bob Meyers and head of corporate communications Jeff Torkelson.

"The decision to eliminate jobs is always a difficult one, and this organizational restructuring is no exception," said Carey, thanking the exiting staffers for their contributions. He said the restructuring will help News' efforts to achieve "greater operational efficiencies" and in its efforts to operate Hughes "with an entrepreneurial spirit and energy."

Sources say final decisions have not been made on which News Corp. staffers will replace these slots or which positions will be relocated to Gotham.

More details will likely be known when Chase Carey presents Hughes quarterly and year-end earnings Feb. 10.

According to its application to the Federal Communications Commission (news - web sites) last year, News Corp. believes it can save between $450 million and $525 million by reducing churn and improving customer satisfaction and another $65 million-$135 million a year from increased operational synergies, such as corporate consolidation. Company expects to gain another $90 million-$100 million by offering new and innovative products and services.

DirecTV claims 12.2 million subscribers, a figure the new management team is confident it can continue to expand thanks to compelling new offers with personal video recorders, improved customer service and expanded program offerings, including new ethnic and international channels. Company is in the process of reviewing its third-party distribution deals with retailers while bringing customer support and sales functions inhouse.

Copyright © 2003 Reed Business Information, a division of Reed Elsevier Inc. Variety is a registered trademark of Reed Elsevier Properties Inc. and used under license. All Rights Reserved
Sounds like ''big news'' for investors that should help the stock. New and innovative products and services.....hmmm maybe there is something new coming out that we never thought of before just like when PVR came out, something new to make satellite even more interesting. Compelling new offers with personal vidoe recorders.....hmmm perhaps some better DVR deals for new and existing subscribers including the HD DVR coming out.

Customer support and sales functions inhouse could also reduce their price of acquiring customers that would allow them to have a good bit more money to spend for new customers without costing them any additional money. Imagine being able to sell direct to most if not all the customers having a showroom setup one per county throughout the U.S. with all employees hired through DirecTv to take care of everything from paying the bills to sales and service just like the cable companies, perhaps handeled by a particular chain store even in the locations that have that store. The savings alone would probably be enough to double the offerings DirecTv currently offers new subscribers and still cost DirecTv less than it does now. The better deals would help drive customers to their center.

I see this happening with Dish Network in the future as well, just wait and see. Everything will eventually be done in-house, it is not a matter of ''if'' but a matter of ''when''. Some retailers/installers may be offered jobs through that one center but at an hourly wage or minimal amount per install, not nearly as much as what some of them make now.
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