By Andrew Moran
It is not only the tech sector that is going through industrywide layoffs and hiring freezes. A growing number of media outlets are firing staff and implementing a broad array of cost-cutting measures in response to recession fears, falling advertising revenue, and annual losses. From CNN to Gannett, more businesses are expected to announce a reduction in headcounts in the coming months.
Overhauling CNN Heading Into 2023
Since Chris Licht took over from Jeff Zucker as CEO following the merger between Discovery and WarnerMedia this past spring, there has been buzz surrounding CNN’s editorial direction. Licht has dismissed suggestions that he wants CNN to be “vanilla” and “centrist.” In an early memo to employees this past summer, he noted that CNN is “focused on informing, not alarming, our viewers.” Licht has employed various personnel and programming changes over the last several months.
One of his first decisions involved terminating network personalities John Harwood, Brian Stelter, and Jeffrey Toobin. He would later announce the departure of Michael Bass, a top programming executive at the news network.
CNN announced that it would lay off nearly 400 staffers, amounting to a single-digit percentage of its roughly 4,400 employees. Some of the names who received pink slips included on-air staff, such as Chris Cillizza, Alex Field, Mary Ann Fox, Alison Kosik, and Martin Savidge. In addition, Licht eliminated all of the live programming at sister station HLN, which involved ousting long-time anchor Robin Meade.
“In some areas, we will rely more on our CNN journalists,” Licht said in a memo obtained by the New York Post. “Overall, we will engage contributors who are subject-matter experts that expand and diversify the viewpoints we bring our audience. Our goal throughout the strategic review process has been to better align our people, processes, and resources with our future priorities, strengthen our ability to deliver on CNN’s core journalistic mission, and enable us to innovate in the years ahead.”
“At the highest level, the goal is to direct our resources to best serve and grow audiences for our core news programming and products,” he added.
This may not be the end of Licht’s shakeup. In an October memo, for example, Licht warned that more layoffs would be coming as he attempts to cut as much as $100 million from the network’s budget amid “widespread concern over the global economic outlook.”
“All this together will mean noticeable change to this organization. That, by definition, is unsettling,” he stated “These changes will not be easy because they will affect people, budgets, and projects.”
Gannett Slashing Headcount
Gannett, the largest newspaper chain in the United States, is slashing approximately 6 percent of its U.S. media division workforce of 3,440 as part of cost-cutting efforts.
The company signaled its measures in August when it cut about 400 jobs and noted that it would not fill hundreds of open positions. Two months later, Gannett announced additional spending cuts, including requiring workers to take unpaid leave and offering voluntary buyouts.
Last month, Henry Faure Walker, chief executive of Gannett’s British media group, Newsquest, warned that the corporation was “not immune to the economic conditions many industries and companies are facing.”
Gannett, which owns USA Today, The Detroit Free Press, The Indianapolis Star, and dozens of other local media outlets, has seen its share price tank this year. Year to date, the stock has cratered more than 53 percent.
NPR Avoids Layoffs
For now, National Public Radio (NPR) will avoid layoffs as it attempts to cut approximately $10 million from the current fiscal year ending Sept. 30, the company announced on Nov. 30.
Instead, NPR will be prioritizing staff and imposing “close to a total hiring freeze,” though CEO John Lansing acknowledged the strain this would place on the current crop of journalists and non-newsroom employees.
“As we did during the pandemic, we are prioritizing our staff and not anticipating layoffs at this time,” he wrote in a memo to staff. “It means we won’t have the skills and support of the people who would have been in the roles that must remain vacant. For those working long and stressful hours, that is not good news. But it is a reality we can’t avoid if we are to save jobs.”
NPR will also reduce discretionary spending and non-essential travel.
Media Industry Adapting to New Environment
The Washington Post recently announced that it would end its Sunday Magazine print edition, resulting in 10 employees losing their jobs.
“We will end the print Sunday Magazine in its current form as we continue to undergo our global and digital transformation,” Washington Post executive editor Sally Buzbee said on Wednesday.
The Walt Disney Company, which maintains a workforce of about 190,000, will execute job cuts and a targeted hiring freeze. A memo from (then) CEO Bob Chapek also revealed that executive business travel would be limited to only essential trips, and other meetings should be completed virtually as much as possible. In the meantime, the company will create “a cost structure taskforce” that will be led by Chapek, CFO Christine McCarthy, and General Counsel Horacio Gutierrez. (Chapek was later replaced as CEO by Bob Iger.)
Paramount Global started its job-cutting campaign last week, focusing on its advertising sales department, Deadline reported. As a result, as many as 100 workers have been let go. This had been widely anticipated during the company’s third-quarter earnings call with market analysts.
“We are all aware of the ongoing macroeconomic pressures that continue to affect our industry and the ad market in particular,” said Paramount CEO Bob Bakish. “As we navigate this period, Paramount will continue to rely on the fiscally disciplined approach that has been our advantage in good times and bad. We have always been mindful of cost management as a company, and we are now taking additional steps to improve efficiency across our organization.”
Even the smaller outfits are struggling. Axios reported that left-wing video news outlet The Recount told employees that it could soon suspend operations as it bleeds money. Reportedly, The Recount, which was launched by journalists John Battelle and John Heilemann in 2018, lost $10 million last year and has struggled to remain profitable.
The Decline in Ad Spending
A crucial part of the media cutting jobs has been the fall in ad spending.
According to Standard Media Index’s (SMI) October 2022 Core Data report, ad spending fell for the fifth straight month, down 3 percent year over year.
Magna, a media investment firm that is part of Interpublic Group of Cos.’ Mediabrands, lowered its ad spending forecast growth for nearly every category in 2023. Analysts projected that ad revenues would grow 4.8 percent next year, down from its June estimate of 6.3 percent.
“The economy has slowed down more than expected six months ago, which was partly mitigated in the U.S. because political spending was even stronger than expected six months ago,” said Vincent Létang, executive vice president of global market research at Magna and author of the report. “Of course, it’s not going to help when it comes to 2023. We’ve reduced the growth expectation for almost every media category for next year, but we still expect that the market will stabilize and not fall.”
GroupM, a mediate and data behemoth, anticipates that global ad revenues will increase 5.9 percent in 2023, down from its previous prediction of 6.4 percent.
While the international advertising industry is not emulating the downtown of 2008 and 2001, most companies are “voicing caution,” according to GroupM’s Kate Scott-Dawkins, the global director of business intelligence.