Turner’s “2020” plan moves forward. CEO John Martin told staffers today that the company will unveil details of a new corporate structure “in the next two months.” In today’s memo, Martin said the company would “start 2015 a more streamlined, nimble and efficient company focused on driving programming, monetization and innovation, in a culture that emphasizes and rewards continuous improvement.” Which, in rough numbers, means “layoffs,” most industry sources agreed.
The news doesn’t come as a shock; back in June, five months into his stint as CEO of Turner Broadcasting System, Martin announced that he was focused on maximizing performance and trimming fat. In a company memo sent out June 2, Martin outlined a global initiative called “Turner 2020.” It would feature a systematic assessment of every part of the company, focusing on “reducing spending and maximizing growth and profitability,” while prioritizing “programming, monetization and innovation investment,” Martin wrote. “We’re increasing investments in programming and content to keep our audiences engaged and bring new viewers to our brands. We’ll also spend on marketing, branding and promotion to break through the clutter.” Martin’s boss, Time Warner CEO Jeff Bewkes, had told investors one week earlier that he had budgeted $4B for original programming at Turner, with a goal to refresh the lineups more regularly. However, the “shifting (of) resources” … “may mean staff changes,” Martin said back then, adding, “In fact, I’ll be surprised if it doesn’t.”
Back then, Turner already had a major staffing change in the works, with Turner Entertainment Networks president Steve Koonin exiting the company. Departed Fox Entertainment chairman Kevin Reilly has been rumored as a potential replacement. Martin’s memo of June, in which he acknowledged that “we have challenges at some of our networks; in particular, some of our largest, most profitable and highest-profile networks have experienced ratings headwinds,” came out on the day some CNN stats came out, marking the net’s lowest rating at 10 PM in 14 years. A month before that, Bewkes had singled out TNT and TruTV as networks whose ratings performance was not satisfying.
From today’s memo:
The 2020 work thus far has been comprehensive and thoughtful. A core team of our colleagues has looked at the purpose, structure and fit of literally every department in the company—more than 700 in all. At the same time, they have researched competitive marketplace practices to understand how other companies—some in our space, and others who like us hold industry-leadership positions—are built and manage wide-ranging work in complex environments. Those benchmarks have been applied to our company to help build recommendations that will move us closer to our long-term goals for Turner.
Division leaders now are reviewing the working groups’ reports on their respective areas of oversight. Over the coming weeks, they will work with me to finalize the organizational changes we will implement. Our plan is to begin communicating in the next two months both general and specific changes we will make to structures, models and roles. You’ll see more information and updates on our progress. Resetting our business operations through the balance of 2014 will position us to move forward aggressively in the new year. We’ll start 2015 a more streamlined, nimble and efficient company focused on driving programming, monetization and innovation, in a culture that emphasizes and rewards continuous improvement.
I fully appreciate the scope and scale of the 2020 initiative and the work being done across our company to support it. I’ve been encouraged by how quickly it has come together and how intentionally we are moving, but that’s a reflection of how seriously people are taking this effort, how invested they are in the future of this company and the certainty that this is what we need to be focused on now. I also understand and appreciate that this work is being done while maintaining day-to-day business operations. Someone compared it to painting a moving train—not a bad analogy, but our goals are much more ambitious than a paint job.