CNN Embarks on Transformation with Layoffs and Digital Focus
Key Points:
* CNN is laying off 200 employees (6% of its workforce) to transition to a digital-first model.
* Warner Bros. Discovery (WBD) will invest $70 million in CNN's digital revamp, including a direct-to-consumer streaming product and premium digital advertising experiences.
* CNN plans to refresh its website, pivot into digital video, and launch a lifestyle-oriented digital product.
* Despite the layoffs, CNN expects headcount to remain relatively stable this year.
* CNN's streaming platform, CNN+, was launched and shut down within a few weeks in 2022.
* WBD's cable business has faced challenges, with a 75% decline in prime-time viewers since 2020.
* Legacy media companies are facing pressure to cut costs due to declining linear network revenue and high debt loads.
* Rumors of strategic options for WBD, including sales and splits, have emerged.
* Bank of America analysts suggest separating WBD's digital streaming and studio businesses from its legacy linear TV unit.
Market Impact:
Shares of WBD remained largely unchanged following the announcement of the layoffs.