I like CNN.com's version of the story better:
http://www.cnn.com/2012/08/18/showbiz/tonight-show-cuts/index.html?eref=mrss_igoogle_cnn

"...The actions were taken as NBC seeks to move the show to a cost
structure typical of late-night programming, as opposed to prime-time
shows, according to the source. Leno replaced the legendary Johnny Carson
as host of "The Tonight Show" in 1992, a job he held for 17 years when he
left in 2009 to helm "The Jay Leno Show" with a 10 p.m. start time. But a
few months later, in January 2010, NBC announced the comedian would once
again move to his old 11:35 p.m. time slot. The Massachusetts-raised
comic's venture into prime time three years ago was pitched as an attempt
by the network to parlay his proven popularity into a commercially
successful show. But lagging ratings prompted NBC executives to change
course within a few months. That move ultimately led to fellow talk show
host Conan O'Brien's departure from the network. O'Brien now hosts a show,
"Conan," on TBS that, like CNN, is a division of Time Warner."

First, it correctly reports Leno's move back to the Tonight Show as being a
function of the poor ratings for his primetime show, not Conan's ratings.
Second, it implies that when Leno went back to the Tonight Show it was
staffed at the level (or the payscale) of his previous primetime show. I
would like to know more about this. Did Leno actually hire more people when
he went to 10:00 than he had had at Tonight? If so, when he returned to
Tonight, did he keep all or most of the extra, and is it this extra that
basically got cut on Friday? It doesn't seem possible that he would really
have had that many more people working in primetime.

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