Little more than two weeks after Turner Broadcasting CEO John Martin told staffers the company’s “2020″ plan was moving forward and he would unveil details of a new corporate structure “in the next two months,” the company emailed U.S. staff, unveiling a buyout package. Just under 600 of Turner’s approximately 9,000 U.S. employees are eligible for what’s being described as the company’s first large-scale buyout offering. It includes workers at least 55 years old with 10 or more years of service as of the end of 2014, excluding on-air talent and those under contract. The buyout package includes CNN, TNT, TBS, and truTV.
Time Warner has been under the gun since earlier this summer, when the media company repelled a takeover bid by Fox CEO Rupert Murdoch in which he’d reportedly offered $85 a share. In addition to increased competition for cable entertainment programming and on the cable news front, the company is facing expected doubling of fees for rights to NBA games — a deal that expires in ’16.
The buyout memo, sent out from the Human Resources department, said the staff reduction will help the company focus on “programming, monetization and innovation” and “shifting capital allocations to high-growth areas where investment will drive growth and profitability” and that the company is “grateful” to those who it hopes will take the buyout who “have made an indelible mark on our business success.”
The memo’s wording echoed Martin’s message in mid-August, when he told staffers the company would soon undergo corporate restructuring in order to “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, roughly translated, meant “layoffs,” most industry wags agreed at the time.
Neither the news back then, nor today’s, came as a shock. 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″ with a focus on “reducing spending and maximizing growth and profitability.” “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.”
At the time, 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 June memo, 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 the same day as some CNN stats marking the net’s lowest rating at 10 p.m. in 14 years. A month before that, Bewkes had singled out TNT and TruTV as networks whose ratings performance was not satisfying.
Here is today’s memo:
August 26, 2014
To support the company’s stated focus on programming, monetization and innovation, we are identifying cost savings and shifting capital allocations to high-growth areas where investment will drive growth and profitability. As part of these efforts, we are offering a Voluntary Separation Program to regular status Turner Broadcasting employees on Turner’s U.S. payroll working in the U.S. and who are at least age 55 and have 10 or more years of service as of December 31, 2014, excluding on-air talent and employees covered by a written employment agreement.
Today, employees meeting these eligibility requirements will receive a confidential, personalized email detailing the program, its benefits and deadlines for acceptance, which is strictly voluntary. This enhanced benefit offering is just one vehicle the company is implementing as part of a comprehensive plan. Given the current focus on reducing costs and prioritizing investments to maximize company performance, Turner will also undertake additional reductions in staffing.
We are grateful to the tenured employees whose service and dedication to Turner Broadcasting have made an indelible mark on our business success.