• by Erik Sass , March 24, 2009

Arbitron, the dominant radio measurement firm in the United States, said Tuesday that it will cut about 10% of its staff in the next couple of weeks, or about 110 employees. The announcement comes a few weeks after Nielsen revealed plans to launch a competing radio measurement service and amid continuing criticism of its Portable People Meter service, a passive electronic measurement device for radio.

Michael Skarzynski, the president and CEO of Arbitron, explained: "The company is realigning and restructuring in order to focus on our strategic priorities: strengthening our radio measurement service and developing new multimedia services." As part of this process, "the company is reevaluating the skill sets that we need, given the rapidly changing and competitive media measurement marketplace. We also believe the cost reductions provided by this restructuring will contribute to the company's long-term success."

Among Arbitron's ongoing strategic initiatives are "increasing cell-phone-only samples and enhancing qualitative data" for PPM data. Nielsen's planned radio measurement service also relies on mobile phones, which some radio executives believe offer greater penetration of key market demos, including young adults and minorities.

Over the last year, Arbitron has come under criticism from big radio broadcasters for alleged flaws in its sampling methodology for certain demographic groups, including African-Americans and Hispanics ages 18-34. This resulted in two civil-rights lawsuits brought by the attorneys general of New York and New Jersey, which were settled earlier this year.

Arbitron is also being sued by one of its institutional investors for allegedly deceiving shareholders about the likelihood of delays in the PPM rollout. The class-action lawsuit, brought by the Plumbers and Pipefitters Local Union #630 Pension Annuity Trust Fund, seeks damages for Arbitron investors who bought stock during that period.

In October, New York State Attorney General Andrew Cuomo expanded his investigation of Arbitron to include possible securities fraud in connection with the same stock sale.