Joe Pompeo writes at Vanity Fair that CNN, led by its president Jeff Zucker, will soon lay off dozens of employees — mostly from “several high-profile digital initiatives” — after the left-wing news network failed to reach revenue targets.
From Vanity Fair:
[D]espite the so-called Trump Bump, CNN appears to be re-thinking at least some elements of its digital strategy. I’ve learned that CNN, a key property in AT&T’s planned takeover of CNN’s parent company, Time Warner, is targeting big savings on the digital side, with as many as 50 jobs around the globe scheduled to be eliminated this week, according to people familiar with the matter, who noted the exact number could still be in flux.
The cuts will affect employees who work in premium businesses including CNN Money, video, product, tech and social publishing, these people said. Several high profile digital initiatives are being scaled back, including CNN’s virtual reality productions and its efforts on Snapchat, where CNN recently nixed a live daily webcast after just four months. CNN’s business-oriented MoneyStream app, as BuzzFeed reported earlier this month, is in the gutter as well. A team that works on the digital extensions of documentary-style TV shows, such as Anthony Bourdain’s Parts Unknown and Lisa Ling’s This is Life, as well as the Brooke Baldwin series American Woman, is also being reorganized.
The budget measures seem to take some heat off the ambitious digital futurism that CNN was preaching just under a year ago. A March 2017 Hollywood Reporter cover story portrayed the network as taking on Vice and BuzzFeed in the battle for digital dominance. Just like with Vice and BuzzFeed, however, the past year has turned out to be a cruel one for just about any business that relies, in part, on revenue from digital advertising. Those three organizations fell short of their revenue projections—part of a larger industry reckoning that has hit digital brands from Mic to Mashable and many others. (CNN missed its target by tens of millions of dollars, according to a person with knowledge of the numbers, who noted that the business line was nonetheless still profitable.)
After all, a lot can change in a year. That Hollywood Reporter cover featured not only Zucker and Bourdain and Jake Tapper, but also You Tube star Casey Neistat, the founder of Beme, which CNN had just acquired for $25 million. Last month, CNN revealed that Neistat had left the company and that Beme was effectively shut down. One insider familiar with the digital strategy described these various changes as a “rightsizing” of resources.
“We’ve been transparent about our strategy,” said Matt Dornic, a representative for CNN. “In order to innovate, grow and experiment, we’ve added more than 200 jobs in the past 18 months. Not every new project has paid off so we will stop some activities in order to reallocate those resources and enable future experimentation. Organizations that do not make big bets and continuously evolve are the ones that fail.”
The looming cuts may not be altogether Earth-shattering for an institution with thousands of employees around the world and $1 billion in annual profits. But one imagines they will at least further rattle nerves within a company already beset by a fair amount of uncertainty, which largely centers around how long Zucker will remain after AT&T’s $85 billion acquisition of Time Warner, assuming the Department of Justice doesn’t succeed in its efforts to scuttle the deal. A trial to adjudicate that matter is set to kick off on March 19 in Washington, D.C.