Spain's Prisa to lay off 18% of staff worldwide

25th January 2011, Comments 0 comments

Indebted Spanish media giant Prisa announced Tuesday it plans to lay off 18 percent of its staff worldwide, or around 2,500 people, in a major restructuring plan.

The decision follows the approval by shareholders last November of a merger with US investment group Liberty Acquisitions Holdings.

Prisa, which owns Spain's leading daily El Pais, "is to carry out a restructuring plan that will involve an 18 percent reduction of its workforce worldwide," it said in a statement.

The plan "will affect about 2,000 people in Spain and another 500 in Portugal and the Americas, although the group has not ruled out a second phase affecting a greater number of employees outside of Spain."

"The process reflects the broad shift taking place in the media sector that requires Prisa's transformation into a new company, focused not only on the production and distribution of content in Spanish and Portuguese, but also on building up a comprehensive knowledge of its stakeholders and on the use of new technologies.

"As a consequence, Prisa must update its production and business model so as to guarantee in the future the sustainability of the company," said the statement, released to Spain's stock market authority.

In addition to El Pais, Prisa owns major newspapers and interests in television, radio and digital platforms in Spain, Portugal and Latin America, where it generates about a fifth of its annual revenues.

But the company, founded after Spain returned to democracy following the death of military dictator Francisco Franco in 1975, had been seeking fresh capital since early last year to refinance its debt of nearly 5.0 billion euros (6.8 billion dollars).

In December, Prisa closed down its all news channel CNN+, a joint venture with Turner Broadcasting, a unit of Time Warner.

The group said the new restructuring plan, which is to be implemented by the first quarter of 2012, is "aimed at safeguarding the greatest number of jobs and provides for a number of different measures, such as outsourcing, voluntary redundancy and early retirement.

It is based "on a thorough analysis of each of the group's companies and is aimed at resizing teams to appropriate levels, achieving the rationalisation of resources, as well as the standardisation and centralisation of global processes."

The plan, approved by the group's executive committee last Friday, "will endow Prisa with the appropriate cost structure to better compete with companies in its sector in a global market."

Under the complex deal involving Liberty, Prisa was to acquire 100 percent of the US group, which was to inject some 650 million euros (883 million dollars) into the Spanish firm.

Family members related to Prisa's founder, Jesus de Polanco, were see their holdings fall to about 35 percent from 70 percent in exchange for the cash injection.

But Prisa has said the Polanco family "will retain control over the company and is guaranteed the continuity of management."

© 2011 AFP

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