Chris Licht, the chairman of CNN, told employees in a memo on Wednesday afternoon that executives would take a hard look at spending across the business, signaling budget cuts and layoffs before the end of the year.
In the memo, Mr. Licht said that concerns over the global economy had forced him to re-evaluate CNN’s priorities, noting that he would make “noticeable change” to the organization.
“That, by definition, is unsettling,” Mr. Licht said. “These changes will not be easy, because it will affect people, budgets and projects.”
CNN will have operating expenses of about $882 million this year, according to estimates from S&P Global Market Intelligence. Even a single-digit percentage cut from that budget would shave millions of dollars and potentially dozens of jobs from the network.
Mr. Licht said in his memo that he would aim to protect CNN’s newsgathering, saying that he would “not allow these changes to affect our position as the world’s leading news source.” He also said that he planned to search for ways to invest in the company’s digital business. Among those groups he hopes to spare are photojournalists and video editors. He also hopes to preserve spending on prime-time and morning programming.
The Race to Rule Streaming TV
Mr. Licht began a business review of CNN not long after he took over in May. As part of that, he asked executives to game-out situations that included cost-cutting, according to three people with knowledge of CNN’s operations.
But those possible cuts were not as severe as those being considered now, because of the worsening economy and pressure from CNN’s parent, Warner Bros. Discovery, the people said. Warner Bros. Discovery said in a securities filing this week that it could incur more than $1 billion in costs this quarter related to restructuring, including severance. It has already announced cuts at many other parts of the business.
CNN’s profitability has sagged this year as its viewership declined and because of the costs of covering the war in Ukraine. The company is expected to dip below $1 billion in profit in 2022 for the first time in years. The network has lagged behind its chief competitors, Fox News and MSNBC, in total viewership this year, though it has notched wins over MSNBC in the coveted advertiser demographic of 25- to 54 year-olds, according to Nielsen data.
The cuts come during a turbulent year at CNN. In April, the network shut down CNN+, its subscription streaming service, a $300 million effort that ended days after it launched. Executives from Discovery determined that the service was too costly, resulting in significant layoffs. After the service was killed, Mr. Licht told employees that he didn’t expect Warner Bros. Discovery to impose additional layoffs at CNN after the shutdown of CNN+ as part of its corporate cost-cutting, though he noted in a subsequent town hall he was conducting the business review.
“No one has said to me, ‘You’re going to have to go cut this,’” Mr. Licht said, according to a recording of his initial remarks obtained by The New York Times.
Warner Bros. Discovery is pushing its business units, which include HBO, TV channels such as TNT, and the Warner Bros. film studio, to work closer together. That could result in more tie-ins at CNN on programs like its revamped morning show as the company looks to promote its new films and TV shows.
CNBC earlier reported that cuts were coming to CNN.
Sumber: www.nytimes.com
