El Sitio, Inc. announced it will implement organizational changes as the company moves towards completing its previously announced merger with Ibero American Media Partners (IAMP), a joint venture between the Cisneros Group of Companies and Hicks, Muse, Tate & Furst Inc., a transaction which will result in the creation of Claxson Interactive Group.
The organizational changes will result in a reduction in El Sitio's total personnel of approximately 25%, based on headcount levels at year-end 2000. These personnel actions are designed to eliminate anticipated overlaps, particularly in the areas of marketing and advertising, sales, corporate and administration, as the Internet businesses of El Sitio are being positioned for the merger with the broadcast radio and TV and pay TV operations of IAMP. El Sitio will assist affected employees with outplacement and provide medical coverage for an extended period beyond that required by law.
"A key aspect of our strategy as we move forward is to identify operating synergies of combining multiple media platforms," commented Leandro Anon, chief operating officer of El Sitio. "Prior to the completion of the merger, it is necessary to implement strategic adjustments in all areas of the company, aiming to be both flexible and operationally efficient as the company pursues its goal of being a leader in the convergence of media in Iberoamerica. These personnel-related moves and other headcount reductions in the fourth quarter of 2000, which we estimate should produce annual cost savings of approximately $8-$9 million, will better position us to become a profitable contributor to Claxson in the future."