Discovery Communications, the Silver Spring-based television programming company, has announced a round of voluntary buyouts that may lead to layoffs as the cable giant looks to cut costs by the end of September.
“If it is not going to nourish audiences or help us grow long term, we are attacking it,” chief executive David M. Zaslav said in a Thursday morning call with investors. “The ultimate goal is to maximize growth.”
Discovery, which oversees 14 channels including TLC and Animal Planet, declined to say how many jobs would be affected. The company employs 1,500 people locally and more than 7,000 worldwide. It is one of Montgomery County’s largest employers.
Zaslav said Discovery could save as much as $120 million per year as a result of the cuts.
“The cost savings will allow us to continue growing our business while investing in . . . key areas,” including sports coverage and international growth, he wrote in a memo to employees on Wednesday.
The company expects to pay between $40 million and $60 million in severance and related expenses, according to a company filing with the Securities and Exchange Commission.
The notification to employees came a day before Discovery reported a 5 percent increase in profit, which grew to $263 million, or 42 cents per share, during the first quarter, up from $250 million, or 37 cents per share, a year earlier.
Revenue, meanwhile, increased 2 percent, to $1.56 billion, which Discovery attributed to strong business in the United States. Internationally, sales declined 3 percent.
“Discovery’s business momentum continued to build in the first quarter with strong viewership across our worldwide portfolio of brands and platforms,” Zaslav said in a statement.
Two years ago, Zaslav was the country’s highest-paid executive, with total compensation of $156.1 million, including $11 million in cash and $145 million in stocks and options, according to company filings with the SEC. In 2015, Zaslav was paid $32.38 million.
Discovery, founded with just its namesake channel in 1985, has long been synonymous with nonfiction and educational programming. In recent years, it has shifted its focus to reality shows such as “Deadliest Catch” and “Cake Boss,” and aggressively expanded overseas, investing heavily.
Earlier this year, the company snagged European broadcasting rights for all four Olympic Games between 2018 and 2024, and last week announced that it had bought a minority stake in Rugby Pass, an online video platform that reaches 23 Asian markets.
“The Olympics will not only be profitable but based on the deal that we’ve done already, we expect the Olympics will make real money for us on each of the games,” Zaslav said on the call.
Last quarter, the company’s Discovery Channel had eight of the top 10 unscripted shows on cable, led by “Gold Rush,” “Fast N Loud” and “Alaska Bush People,” Zaslav said. Its Investigation Discover channel, which includes shows such as “Murder Among Friends” and “Evil Stepmothers,” was ranked second among female viewers.
But, Zaslav said, Discovery is looking for growth beyond those channels, especially as customers increasingly ditch their cable subscriptions in favor of online video options such as Hulu and Netflix.
“Beyond traditional paid TV, people want access to our brands and content across all screens,” Zaslav said. “We are making progress in how and where we reach consumers, particularly younger viewers.”
The company has a mobile app, Discovery Go, which allows on-demand access to its shows, as well as a virtual reality app, Discovery VR, that gives users a 360-degree view of some of its most popular shows, including “Survivorman” and the annual “Puppy Bowl.”
“We’ve been investing significantly more in content each year,” Zaslav said on the call. “As we looked at the overall infrastructure, we just felt there was a lot of opportunity to attack all of our other costs.”
Shares of Discovery stock rose 4.3 percent, or $1.15, to close at $27.74 on Thursday.