• by Wayne Friedman , October 18, 2008

With the economy on the verge of a major recession, NBC says it will make major cuts--chopping back $500 million from the company's 2009 budget, around 3%.

Jeff Zucker, president and chief executive officer of NBC, in sending a memo to staffers on Friday, specifically noted that the company was "living in a time of unprecedented economic challenges." NBC Universal's yearly budget is $16.7 billion.

NBC, a part of General Electric, has been showing modestly strong results recently, increasing its third-quarter profits by 10% versus a year ago.

Not surprisingly, Zucker noted that division heads will be left to decide where to cut, but that three areas should be considered: "reductions in promotion expenses; in discretionary spending, such as travel and entertainment and outside consultants; and in staffing costs."

Earlier reports in the day said that NBC's Spanish-language network, Telemundo, was cutting staff by 85 personnel--reducing its workforce 5%. Zucker says this is NBC's planning time for 2009. He added: "It has become evident that the decline in consumer confidence and spending will impact our operations."

News of the big $500 million in proposed NBC cuts was first reported in Broadcasting & Cable.

Two years ago this month, NBC Universal announced, under its "NBC 2.0" initiative, that it would cut 700 jobs as part of an effort to save $750 million a year.

Other media companies have also been taking some drastic actions. CBS said it would write down $14 billion this week. Both CBS and sister company Viacom said they were cutting their profits forecasts because of a weakening advertising market.