CNN will be terminating close to 50 employees as a result of restructuring in their digital news operation. This “retrenchment” is happening among its digital properties. These layoffs are happening due to the challenges faced across the digital media marketplace. The advertisement sales setup is losing ground because publishers are making job cuts and coming up with new strategies.
In an informal chat with their New York based employees, CNN president Jeff Zucker stated that the total number of layoffs would be less than 50. He also discussed the wider industry landscape, indicating the strengthening of the “digital duopoly,” acknowledging that Facebook and Google take a major share of the advertising revenue. He discussed the changes in the way through which platforms are letting publishers such as CNN to monetize the content they provide.
“We tried to do too much too fast,” Andrew Morse, general manager of CNN Digital and executive VP editorial for CNN U.S., explained to digital employees. Morse stated that the digital financial targets of CNN were “overly aggressive” and “the monetization engine wasn’t aligned with the growth strategy.” However, Morse assured the employees that CNN Digital is a growing business, and that the executives are not “managing decline.”
“We’ve been transparent about our strategy,” the company explained. “In order to innovate, grow and experiment, we’ve added more than 200 jobs in the past 18 months. Not every new project has paid off, so we will stop some activities in order to reallocate those resources and enable future experimentation. Organizations that do not make big bets and continuously evolve are the ones that fail.”
CNN had to cancel their daily Snapchat news show called “The Update” within four months of its initial release, as the network couldn’t find a way to make money. The network couldn’t rely on ad sales.
CNN is currently in the midst of a regulatory battle with AT&T and the Department of Justice. The 24-hour news network wants to procure Time Warner for $85 billion as a means to get access to their content. The DOJ wants the deal to lead to a CNN divestiture so that the deal will receive regulatory approval, however AT&T has no intent in doing so.