Turner Broadcasting has launched a significant round of cost-cutting, with plans to eliminate several hundred workers.
The move, announced Tuesday, comes after a nearly three-month review of the business initiated by John Martin, who earlier this year became chief executive of Atlanta-based Turner Broadcasting. The unit includes CNN, TBS, TNT and Cartoon Network.
The voluntary buyouts are being offered to fewer than 600 employees based in the U.S., according to a person familiar with the plans.
To be eligible, workers must be at least 55 years of age and have worked at the company for 10 or more years, according to a memo sent Tuesday morning to Turner employees.
The company said it would make other cuts, too, although it did not disclose the overall number of workers it plans to shed.
Turner Broadcasting has seen its fortunes fade in recent years amid ratings declines at key networks, including CNN, TBS and TNT. In addition, cable networks industry-wide experienced softer-than-expected advertising sales during this summer’s upfront advertising sales.
Jeff Bewkes, chief executive of parent company Time Warner, is under pressure from Wall Street to provide a road map for investors to show how the company intends to navigate an increasingly competitive landscape.
Time Warner promised that it would unveil a comprehensive business plan this fall in the wake of the unsolicited $80-billion bid for Time Warner made by Rupert Murdoch’s 21st Century Fox.
Bewkes and others on the Time Warner board refused to engage in discussions with Murdoch, who withdrew Fox’s bid earlier this month.
But Fox’s short-lived pursuit caused Time Warner stock to soar, trading above $85 a share for several days last month. After Fox pulled its offer, Time Warner shares plummeted -- aggravating some investors.
Still, Time Warner shares are trading at roughly $77 -- about 8% higher than when the Fox offer became public.
Wall Street now is demanding to see how Time Warner, by remaining independent, can grow earnings.
One analyst last week recommended spinning off the company’s crown jewel, premium channel HBO, but knowledgeable executives say the company has no intention of separating HBO -- which is widely viewed as a key growth engine for the entire company.
In early June, Time Warner divested its magazine unit Time Inc. into a separate publicly traded company.
“We are identifying cost savings and shifting capital allocations to high-growth areas where investment will drive growth and profitability,” Turner Broadcasting said in a memo to employees Tuesday morning.
Tuesday’s announcement affects about 7% of Turner’s 9,000 workers in the U.S. The company has nearly 13,000 employees world-wide, and about half of those are based in Atlanta.
On-air talent at the networks, and employees who have employment agreements, are not being offered the buyouts.
Turner Broadcasting also includes HLN, Turner Classic Movies and truTV.
“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,” Martin said in an email to employees last week.