New CEO Michael Skarzynski continues with his reorganization of Arbitron. This time he’s cutting staff by 10% and ordering other cost reductions. The staff layoffs cut across all departments and included at least one veteran executive, 24-year Arbitron veteran Jay Guyther, most recently Sr. VP, Ratings Services. Arbitron says the workforce and expense reductions will result in annual savings of about $10 million.
Also gone from the Arbitron staff is Tom O’Sullivan, who had been designated the “diary czar” to oversee the company’s commitment to improving its diary service. And RBR/TVBR learned that Chief Research Officer Bob Patchen was quietly dispatched at the time Owen Charlebois, who had been President, Technology and Research & Development, left in the first round of the reorganization.
In all, approximately 120 people were fired in the two reorganization moves, most of them yesterday. According to its annual report, Arbitron had 1,100 full-time employees at the beginning of the year.
“The company is realigning and restructuring in order to focus on our strategic priorities: strengthening our radio measurement service and developing new, multimedia services. This restructuring is also designed to speed decision-making so that we can better capitalize on growth opportunities,” said Skarzynski in announcing the realignment he had previously said would be completed in Q1.
“The workforce reduction was a difficult and painful decision and I am grateful for the contributions of all of our employees. Arbitron is offering transition assistance and outplacement support for those colleagues exiting the company as a result of this restructuring and expense reduction program,” he said.
The CEO also sought to reassure the people who buy Arbitron’s services. “Our customers will continue to receive the quality services that they have come to expect from Arbitron. We remain committed to our continuous improvement programs, which include increasing cell-phone-only samples and enhancing qualitative data. We also intend to invest in Arbitron’s strategic growth areas,” Skarzynski said.
Asked about the much-touted diary improvement project, Arbitron Sr. VP Press and Investor Relations Thom Mocarsky told RBR/TVBR, “We remain focused on the diary initiative we have put in place.” That was announced last October and expanded just a month later.
Jay Guyther told RBR/TVBR he’d received many phone calls and emails yesterday from friends and clients expressing surprise at his ouster and wishing him well. Guyther said he’d spoken very little with the new CEO since Skarzynski took over and “I was not part of the new reorganized structure he wanted.”
As a result of the realignment, Arbitron said it expects to incur pre-tax expenses of $8-9 million in Q1, related primarily to severance and benefit expenses. However, as a result of the actions being taken, the company expects to realize savings in the balance of 2009 that will offset the Q1 charge. As mentioned above, the workforce and expense reductions are expected to result in a saving of more than $10 million in 2010.
What’s yet to come? Skarzynski has not yet announced who will fill the three new Executive Vice President positions he said would be created. Those are:
— Executive Vice President, Customer Solutions, responsible for survey research methods and product management as well as for developing improvements to existing services for the radio industry and new multimedia services for domestic and international markets;
— Executive Vice President, Strategy and Business Development, responsible for originating, executing and integrating business partnerships, acquisitions, joint ventures, licensing arrangements and strategic investments; and
— Executive Vice President, Chief Marketing Officer, responsible for marketing, communications and brand.
RBR/TVBR observation: Hardly unexpected, but clients will be wanting answers about how Arbitron will maintain the service they’re paying for, even as many companies are shelling out more than ever because of the PPM rollout. The Arbitron Radio Advisory Council meets April 27-28 in Baltimore and there will likely be lots of questions for Skarzynski.