According to media reports, Time Warner Inc’s (TWX) HBO division will be reducing 7% of its workforce as early as this week. In the last couple of months, the company’s other two divisions Turner Broadcasting and Warner Bros. have also announced sizeable layoffs.
HBO, which employs about 2,400 employees, will lay off nearly 150 staff across the board. The development comes on the heels of the company’s announcement of an independent streaming service for HBO Channel to be launched in 2015.
After thwarting an $80 billion bid by Rupert Murdoch, CEO of Twenty-First Century Fox, Inc. (FOXA), Time Warner has taken restructuring aggressively. As per an internal memo, Time Warner, which is confident of performing better as a standalone company, will be focusing on original programming, reducing costs and increasing investments in key areas to enhance profitability.
These layoffs are a part of this streamlining process. At Turner Broadcasting, which houses cable channels like CNN, TNT and TBS, nearly a tenth of the workforce will be eliminated. Elimination will span across 18 worldwide locations and at all levels ranging from news, entertainment, sports to corporate jobs.
Moving to Warner Bros, which saw one of the most disappointing summers at the box office, the company is likely to dismiss employees as it prepares to reduce $200 million in costs.
Layoffs are rife within the media/publishing circle. Apart from Time Warner, two other giants announced their plans to trim their workforce in order to rein in costs and divert resources to improve profitability. These include The New York Times Company (NYT) and Gannett Co., Inc. (GCI).
It is now extremely important for Time Warner, especially after thwarting Murdoch’s deal, to successfully execute its strategies to retain investor confidence.
At present, Time Warner is a Zacks Rank # 3 (Hold) stock.
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