Media ratings firm Nielsen Holdings plans to lay off 333 workers in Columbia — more than one-third of the workforce at what had been Arbitron Inc.'s headquarters — as the two former rivals combine their businesses.
New York-based Nielsen, which closed the $1.3 billion purchase of Arbitron in September, immediately renamed the radio ratings company Nielsen Audio and told Wall Street analysts it expected "wonderful cost synergies" as it meshed the two firms.
Company officials declined to comment on the cuts but said they are "implementing changes across the company to enhance growth and to align our resources."
"These changes will improve productivity and innovation for the benefit of our organization, clients and shareholders," Nielsen officials said.
Nielsen, known for its television ratings, and Arbitron, founded six decades ago, had competed over the years in the field the other dominated but eventually specialized in different media markets. Each has built reputations for tracking trends in such areas as media audiences and buying habits, information they sell.
Combined, the companies have overlapping functions — more than some industry observers had expected.
John Borchers, an employee at the Columbia complex, said he was told his job will disappear at the end of February. That gives him a few months to prepare. His job is in the panel relations division, which works with radio listeners and is among those facing cuts.
"There's some time to start wrapping the mind around it," said Borchers, who joined Arbitron about two years ago. "A lot of people have been impacted."
Nielsen's layoff warning notice to the Maryland Department of Labor, Licensing and Regulation indicated that the job cuts would begin Jan. 14.
Company officials informed the Columbia staff of the layoffs in a companywide announcement Thursday, followed by individual meetings, employees said Friday. They said they expected the impact to be staggered and had been warned that more layoffs might follow.
When the merger was first announced late last year, Arbitron employed nearly 1,000 full-time workers nationwide. The Columbia complex had 640 full-time employees and 220 part-time workers at the time.
Nielsen is expected to continue to be one of Howard County's largest employers after the layoffs, according to Lawrence F. Twele, head of the county's economic development authority.
"While we are prepared to help the displaced workers find employment, which we believe they will quickly, we are happy to hear that Nielsen Audio will be maintaining the majority of the workforce here because of their technical capabilities," Twele said.
Nielsen CEO David L. Calhoun, speaking to analysts last month, outlined areas where he saw duplication.
"The headquarter stuff is easy, because you don't need two headquarters," he said, according to a transcript. "The functional support stuff is relatively straightforward, because you only need one accounts payable processing. You only need one receivables. ... I'm confident that we can express big synergies quickly, because I know that path and we're on it."
Calhoun had played down the possibility of antitrust concerns in a Wall Street Journal interview, saying there was barely any overlap between the two companies' markets.
That lack of market overlap had led Baltimore economist Anirban Basu to believe the companies would avoid steep layoffs because they appeared to be complementary rather than duplicative.
"Nielsen has its fiduciary duties to its stakeholders, I understand that, but the fact of the matter is, the pursuit of the fulfillment of that duty has translated into a very bad day for Maryland," said Basu, head of Sage Policy Group, an economic and policy consulting firm.
The layoffs will hit a county that has seen more economic recovery than most of the state. Its unemployment rate this year has averaged 5.2 percent, tied with Montgomery County for Maryland's lowest. Howard regained its pre-recession employment base in early 2011 and added 9,000 jobs over the next two years, according to the most recent data from the state.
Howard County Executive Ken Ulman said the county would help Nielsen's laid-off workers and that the local economy "remains strong." The county and state expect to offer job-hunting assistance at the company's campus.
"That is a top priority for our team, and we will do all we can for these workers to ease the transition," Ulman said.
Nielsen edged into radio measurement in 2008. But it couldn't make inroads against Arbitron and later pulled out, said Michael Harrison, publisher of RadioInfo and Talkers, two radio industry magazines.
Harrison said Nielsen told his publications as recently as Oct. 2 that it had no immediate plans to cut staff at the former Arbitron.
"It's kind of wild that a company comes along and spends all the money that they did to pick up one of the most identifiable brands in the radio industry and then eliminates it," he said. "If you eliminate the brand and you eliminate the staff, what are you buying?"
He figures Nielsen was mainly interested in Arbitron's technology. The Columbia company had been trying to better measure a difficult-to-track audience with "Portable People Meters." The devices automatically track what listeners would otherwise have to make note of manually: What stations and shows did they tune in to in the past week?
For decades, Arbitron listeners used paper diaries. It began introducing the Portable People Meters in 2007, though small sample sizes drew customer complaints. Nielsen said it would increase the samples by 20 percent in select markets, the trade journal Radio World reported last week.
Founded in 1949 as the American Research Bureau, Arbitron began life as a television ratings service, adding radio measurement in 1964. Eventually, the battle with Nielsen for TV business proved too difficult and Arbitron got out of that market in 1993, laying off 733 people.
Harrison expressed concern that radio measurement might get lost amid Nielsen's multimedia empire. He pointed to the company's decision to shut down the long-standing trade publication Radio & Records in 2009, a few years after acquiring it.
"I hope that Nielsen continues to service radio," he said. "They claim they will, but we worry about that."