NBA Cuts 11% of Workforce

July 15, 2011

The National Basketball Association (NBA) has cut 114 jobs, pills 11 percent of its workforce, as part of a plan to reduce US$50million in costs.

The cuts come two weeks after the league locked out its players following a failure to reach an agreement with team owners on a new labour contract.

NBA spokesman Mike Bass said: “The layoffs are not a direct result of the lockout, but rather a response to the same underlying issue; that is, the league’s expenses far outpace our revenues.”

The NBA and its players disagree over how to split money from a league that said it will lose about US$300m this year from revenue of about US$4.3bn. Owners want to tighten payrolls, while players say they should not be punished for management errors. The NBA said in April that 22 of the 30 franchises are losing money.

Bass said: “The roughly 11 percent reduction in headcount from the league office is part of larger cost-cutting measures to reduce our costs by US$50m.”

The cuts were primarily made from departments including marketing, community relations, player programs, broadcasting and information technology.

According to Bass, the reductions would have happened regardless of the lockout and the workers will not be rehired once the dispute is over. The cuts are the first major job losses in the NBA since they had cut 275 workers in 2008.

In October 2008, Stern announced a 9 percent cut on its U.S. staff after season-ticket sales slowed.