CNN starts layoffs in what CEO says will be a ‘punch in the gut’ for the network

By | November 30, 2022

New York
CNN Business

CNN told employees on Wednesday that the layoffs had begun, a move that is expected to impact hundreds of employees at the global news network and mark the deepest cuts at the organization in years.

Chris Licht, who took over as the chain’s chief executive in May, described the cuts in a memo to all employees as a “punch in the gut” for the organization and told employees that “it’s incredibly difficult to say goodbye to any member. from the CNN crew, let alone many.

The company’s employees had been eagerly preparing for the layoffs since Licht informed them last month that “disturbing” changes were coming.

Licht said that on Wednesday the company would notify a “limited number of individuals,” largely paid taxpayers, that they had been laid off. He said the company will “notify affected employees” on Thursday. Licht said at the conclusion of the cuts that he “will follow up in more detail”.

“It will be a difficult time for everyone,” Licht said candidly in his memo.

CNN declined to say on Wednesday precisely how many employees would be affected by the layoffs.

The layoffs come as media companies are being hit by the brutal economic turmoil that has hit the advertising industry. Licht noted in October, when he signaled that big cuts were coming, that there is “widespread concern about the global economic outlook” and that CNN “must take that risk into account.” [its] long-term planning”.

Other media organizations have also cut costs as they work to better position themselves for the stormy economic climate. Disney (DIS) said last week that the company needed to restructure, and AMC Networks (AMCX) announced on Tuesday that it would cut 20% of its staff. Social media companies like Meta, parent company of Facebook (FB), which also rely on advertising revenue, have also executed layoffs in recent months.

CNN, which still posts hundreds of millions of dollars in profits, was spared the cuts that wreaked havoc on the industry during the pandemic. Prior to this year, the last major cutbacks to take place at the organization were in 2018, when less than 50 people lost their jobs due to the restructuring of the company’s digital business.

The cuts to the organization also come after former CNN parent WarnerMedia merged earlier this year with Discovery, creating a media juggernaut with billions of dollars in debt and a need to cut costs across the board. The merger had just been completed in April, when the company announced it would shut down the CNN+ streaming service a month after its launch.

David Zaslav, chief executive of Warner Bros. Discovery, the company formed when WarnerMedia and Discovery merged, has promised investors that they will find more than $3 billion in savings in the combined organization.

After Licht took over as head of CNN, he conducted a months-long review of the business. That review led him to identify changes that should be made, Licht said in October. Some of these changes have already been implemented, as CNN has made smaller cuts to parts of its business in recent months.

Licht said in his memo to all employees on Wednesday that employees affected by this week’s cuts will be notified “either via an in-person meeting or via Zoom, depending on your location.”

“At these meetings, you will receive specific information about the notice period or any applicable termination and the anticipated last day,” Licht said. “I want to make clear that all bonus eligibles will still receive their 2022 bonuses, which are determined by company performance.”

Licht acknowledged that the cuts “will affect our colleagues leaving as well as those who remain” and promised to provide employees with “resources designed to support them”.

“Let’s look out for each other this week,” Licht said.

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