CNN to Cut 6% of Workforce in Digital-First Shift

In a move to bolster its digital presence, CNN plans to lay off approximately 200 staffers, or 6% of its workforce. The cable network's parent company, Warner Bros. Discovery (WBD), intends to invest $70 million in the transformation, focusing on a new direct-to-consumer streaming product and enhanced digital ad experiences.

Digital Focus

CNN's revamp will include website enhancements, a pivot to digital video, and the launch of a novel lifestyle-oriented digital product. CEO Mark Thompson emphasized that the job cuts are part of a broader effort to adapt to the evolving media landscape. "Our goal is to... secure CNN's future as one of the world's greatest news organizations," he stated.

Market Reaction

Shares of WBD remained largely unaffected by the announcement. CNN had previously attempted a direct-to-consumer offering with CNN+ in 2022, but the service was discontinued within weeks. Nielsen data reveals a 75% decline in prime-time viewership over the last two years.

Industry Challenges

The decline in linear network revenues, coupled with heavy debt burdens, has compelled media giants to reduce costs. Rumors of potential sales or splits have surfaced, with Warner Bros. being at the center of M&A speculation following the end of its post-merger lockup period. The future remains uncertain after the loss of key NBA rights and the dissolution of Venu Sports, a planned sports streaming venture with Disney and Fox.

Strategic Options

Bank of America analysts have suggested strategic options such as separating WBD's digital streaming and studio businesses from its linear TV division. CEO David Zaslav has indicated that the company is considering "all things operationally and strategically." Alexandra Canal, Senior Reporter at Yahoo Finance, has provided additional insights on the industry's challenges and CNN's transformation efforts.