Warner Bros. Discovery‘s WBD CNN is preparing to lay off hundreds of employees this week, reflecting the ongoing digital transformation in the news media landscape.
What Happened: The layoffs, expected Thursday, will help CNN refocus its business around a global digital audience while lowering production costs, CNBC reported, citing sources.
With approximately 3,500 worldwide employees, the cuts will primarily consolidate teams and potentially relocate certain show productions to more cost-effective locations like Atlanta.
CNN CEO Mark Thompson recently disclosed an investment exceeding $70 million from Warner Bros. Discovery to fund digital operations, including strategic hiring in areas like data science and product development. In October, the network launched a digital paywall charging $3.99 monthly for heavy site users.
The media industry transformation continues as streaming and digital platforms increasingly replace traditional linear television. NBC News is also planning minor cuts this week, with job losses estimated at under 50 employees.
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Why It Matters: This restructuring comes amid a challenging media landscape where streaming services like Netflix Inc. NFLX are dominating entertainment consumption.
Netflix recently reported record subscriber growth of 18.9 million in the fourth quarter, highlighting the industry’s dramatic shift.
Warner Bros. Discovery is simultaneously navigating complex challenges, including underperformance of film properties like “Joker: Folie a Deux” and the loss of NBA broadcast rights.
Goldman Sachs analyst Michael Ng noted the company’s direct-to-consumer segment remains a potential bright spot, with an estimated 2025 earnings potential.
Billionaire media moguls Jeff Bezos, Marc Benioff, and Patrick Soon-Shiong saw significant financial losses last year in their media ventures—The Washington Post, Time Magazine, and The Los Angeles Times, respectively. Despite high hopes for revitalizing these storied publications, they continue to face steep challenges, including declining advertising revenue and the costly transition from print to digital formats.
Price Action: Warner Bros Discovery stock closed at $10.05 on Wednesday, up 2.87% during regular trading hours. In after-hours trading, the stock remained relatively unchanged. Over the past year, the stock has declined by 4.65%, according to data from Benzinga Pro.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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