Turner Broadcasting’s job reductions could grow to as many 1,500 workers, a person with direct knowledge of the situation said Tuesday.
Word of broader job cuts comes as Turner executives confirmed plans this week to offer buyouts to 600 older workers as part of a corporate restructuring.
Turner has acknowledged cuts will go beyond the buyouts but has not given a total target.
The company says TV industry changes are largely driving the cuts. But some analysts say parent Time Warner is under extra pressure to boost its financial performance after rejecting a buyout offer from Rupert Murdoch’s 21st Century Fox.
It’s unclear whether the 1,500 potential cuts are in addition to the buyout offers, or how many would be among Atlanta workers. That number amounts to more than 10 percent of Turner’s global workforce.
Asked about the figure, Turner spokesman Jeff Matteson said the company “does not comment on rumors and speculation.” Two executives who asked not to be identified have told The Atlanta Journal-Constitution that Turner has not set an overall job reduction number.
Turner, which includes CNN, TNT, TBS, Cartoon Network, truTV, HLN and other networks and online sites, has about 13,000 full-time employees worldwide, about 6,500 of them in metro Atlanta. CNN accounts for about 3,500 full-time employees worldwide, with a large chunk of them in downtown Atlanta.
The potential scale of the cutbacks worries city and business leaders. Speaking to a Buckhead business group Tuesday, Atlanta Mayor Kasim Reed cited CNN as an iconic part of the city’s business community and voiced concern about restructuring.
“CNN is a brand that has been inextricably linked to the city of Atlanta because of Ted Turner,” Reed told reporters at the gathering.
The mayor said he’s had “delicate” talks with Turner executives but declined to give details.
“Right now, I’m focused on trying to keep as many individuals in the city of Atlanta and employed as I can, on what is an amazing campus that contributes so much,” Reed said.
“We’re just waiting to hear what leadership’s decision is,” he said.
On Tuesday, Turner notified nearly 600 of its 9,000 U.S. employees that they qualify for a voluntary buyout. Workers 55 or older with at least 10 years of Turner employment qualify for nine weeks of pay plus four more weeks of pay for every year of service. The payout is capped at 104 weeks of pay.
The company made clear that even with the buyouts, further job cuts are expected later this year.
Sam Massell, president of the Buckhead Coalition and a former Atlanta mayor, said after the event with business leaders that he was sorry to learn about potential cuts at a landmark Atlanta company.
“Some folks have civic commitment, and some don’t, and it shows,” he said.
New Turner CEO John Martin splits his time between New York and Atlanta, but he’s based in the Big Apple.
Turner, which makes up about 40 percent of Time Warner’s revenue, remains profitable. But ratings have sagged at some of its networks, costs to license and air sports events have risen sharply and it faces concerns that some operations grew bloated over the years.
The TV industry overall is wrestling with how to increase profits as viewers become more demanding and turn online for shows. Netflix and other streaming options threaten the traditional basic cable revenue stream tied to airing reruns of popular broadcast series.
In addition to those challenges, Time Warner earlier this summer rebuffed 21st Century Fox’s offer to buy the company for $85 per share, saying it can create more value for investors by staying independent. But some think Murdoch or another hostile suitor could return.
That’s upped the pressure on Time Warner CEO Jeff Bewkes and set expectations on Wall Street that Time Warner can reach perhaps $100 a share, Wells Fargo Securities analyst Marci Ryvicker told The Atlanta Journal-Constitution last week. Shares closed Tuesday at $76.98, up 3 cents.
Cutting costs can boost profits, which could raise investor confidence and the share price. But cuts alone won’t get Time Warner’s share price to $100, Ryvicker said. They have to grow revenue substantially, she said.
Turner is Time Warner’s second-largest division by revenue, so it has a big impact on the parent company’s overall sales and profits.
The biggest ratings turnaround projects within Turner are TNT and CNN. Though the news operation and its websites remain profitable, its flagship U.S. network continues to trail Fox News in key prime time ratings and advertising revenue. Viewers tend to tune in during breaking news and crisis, but don’t watch as regularly as do Fox News viewers.
Turner reported revenue of $5.34 billion in the first six months of 2014, and $9.98 billion in all of 2013, according to filings with the Securities and Exchange Commission. According to data from SNL Kagan, CNN is projected to generate $1.1 billion in operating revenue in 2014, or about 11 percent of Turner’s revenue if based on 2013 results.
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