Time Warner's Turner Broadcasting division will eliminate 1,475 positions, about 10% of its global workforce, as part of a broader initiative to improve profitability.
The cuts will take place at 18 locations worldwide, and include news, entertainment and sports, as well as corporate jobs, the company said yesterday in a statement. Turner, which operates CNN, TNT and TBS, has about 14,000 full-time employees, according to the statement.
Time Warner, based in New York, is under pressure to improve its performance after CEO Jeff Bewkes spurned a $75 billion buyout offer from Rupert Murdoch's 21st Century Fox and said his company would deliver better returns to investors on its own. Eliminating salaries will free up cash for new investments, such as in live sports.
"We have been in this process, and a lot of companies have, of trying to make our company more nimble and streamlined," Mr. Bewkes said yesterday at a conference in Beverly Hills, California, calling the job cuts "tough news for those that are involved."
Time Warner fell 1.2% to $73.82 at the close in New York. The stock has gained 10% this year, giving it a market value of $63.1 billion.
Turner CEO John Martin, appointed to his post in January, forecast staff cuts four months ago in a memo outlining plans to reduce costs and reorganize operations. As part of the plan, dubbed Turner 2020, he promised new programming to help lift ratings at Turner networks.
Warner Bros., home to Time Warner's film and television studio, also announced plans to eliminate jobs last month.
"They want to have the ammunition to invest in programming," said Anthony DiClemente, an analyst with Nomura Securities International.
Yesterday, the Turner division renewed its contract to carry National Basketball Association games, part of a $24 billion deal that also includes Walt Disney Co.'s ESPN. Turner manages the NBA's digital portfolio, including its website and the NBA League Pass TV service.
"This is huge for us," Bewkes said. "The NBA is getting better and better, getting to be a more important sport."
The company will say more about the deal at an investor meeting next week, Bewkes said.
Time Warner hired former NBC Universal CEO Jeff Zucker to run CNN almost two years ago. He has introduced new shows like "Anthony Bourdain Parts Unknown" at the cable news network.
Mr. Bewkes called the new programming efforts "promising" and said CNN is expanding the range of news it covers.
"We haven't given up or slacked off at all," he said.
But CNN's ratings have slipped in the past year, and the channel remains a distant second to Fox News. Mr. Bewkes said there's too much focus on TV ratings and not enough on CNN's digital activity, particularly with more news being consumed online and on mobile devices.
Turner's operating income rose 15% to $940 million in the second quarter from a year earlier, while revenue climbed 4.7%. It's Time Warner's most profitable unit.
The cuts yesterday include buyouts announced in August, along with firings and the elimination of unfilled positions. Turner will add about 150 new jobs in growth areas, the company said.
"What they're trying to do is invest in their networks, take creative risks with networks like TNT, reorganize and reinvigorate CNN, and also use their sports franchises to drive value for TNT in particular," Mr. DiClemente said.
~ Bloomberg News ~