Employees at the Turner Broadcasting unit of Time Warner Inc. (NYSE:TWX) are bracing for big changes following news that the Atlanta-based media company is seeking to reduce costs.
Amid rumors of deep layoffs, the company confirmed on Tuesday that significant staff reductions are being planned for its suite of cable networks -- which include CNN, TBS, The Cartoon Network and others -- CNN’s Brian Stelter reported. The reductions will begin with voluntary buyouts but will also involve layoffs and other cost-cutting measures, Stelter said, citing an internal memo.
About 6 percent of Turner’s 9,000 U.S.-based employees will be eligible for the buyout program, which will be offered to employees 55 and older who have been with the company for longer than 10 years. (Eligible volunteers get nine weeks’ salary in addition to four weeks’ salary for each year of employment.) The move, Stelter notes, marks the first large-scale buyout program in the company’s history.
Layoffs are likely to follow the buyouts, although Stelter did not say how deep they will be. The Atlanta Journal-Constitution, citing multiple sources, estimated that 15 percent to 20 percent of the company’s workforce -- or as many as 2,000 employees -- could be affected by the cuts.
Turner’s announcement comes one day after AJC reported rumors of the buyouts, citing anonymous company executives. AJC also published two company memos from John Martin, Turner’s chief executive, outlining some of the planned cuts. According to the Metro Atlanta Chamber of Commerce, Turner Broadcasting is the 20th-largest employer in the area, with 6,700 local employees as of 2012.
The reductions come at a time of significant flux for Time Warner, which recently shed its struggling magazine division, Time Inc. (NYSE:TIME), in an effort to streamline its operations and focus on its more profitable media and entertainment units. Turner makes up about 37 percent of Time Warner’s revenue, but it recently came off a challenging quarter, with viewership down about 10 percent across its networks. CNN, in particular, has undergone a major programming overhaul in the last year, but ratings have still struggled.
According to Stelter, the cuts at Turner are part of a larger plan known internally as “Turner 2020,” which was announced in early June.