CNN has announced it is laying off approximately 200 employees, representing around 6% of its workforce. This move is part of a broader strategy by CEO Mark Thompson to reorient the company toward digital growth and prepare for the launch of a new streaming service.
The layoffs come as CNN grapples with a challenging business environment. Cable television has faced consistent decline due to cord-cutting and reduced trust in traditional media. According to Nielsen data, CNN averaged 578,000 prime-time viewers in the last quarter of 2023, a 74% drop from its peak in late 2020. Comparatively, MSNBC’s viewership declined by 62%, and Fox News saw a 27% dip during the same period.
Despite the job cuts, Thompson assured staff that the total headcount for the year would not decline significantly, as the company plans to invest in new roles and bolster its digital and technology divisions.
Adapting to a Changing News Landscape
Thompson has emphasized the importance of CNN’s digital transformation since he joined the network in October 2023. In a memo to employees, he highlighted the “profound and irreversible shifts” in how audiences consume news, with an increasing preference for smartphones and other digital devices.
“Traditional television can no longer define us,” Thompson stated, underscoring the need for CNN to expand its digital footprint. To support this transition, parent company Warner Bros. Discovery is investing $70 million in CNN’s digital efforts. Thompson described the initiative as “a process of investment, experimentation, and adaptation that will last years.”
Introducing New Revenue Models
As part of its pivot to digital, CNN is introducing new revenue streams, including a subscription paywall on its website. Starting in October 2023, CNN.com began charging users $3.99 per month for unlimited access, after a certain number of free articles. This move aligns with a growing industry trend toward subscription-based models for online content.
In addition to the paywall, CNN is planning to launch a new streaming service. While the specifics are still in development, the network currently offers CNN Max, a live-news service within Warner Bros. Discovery’s Max streaming platform. Thompson noted that CNN Max has provided valuable insights into the type of programming that appeals to streaming audiences.
CNN’s previous attempt at a standalone streaming service, CNN+, was short-lived, shutting down just a month after its launch in 2022. However, the network hopes its new strategy will yield better results as it builds on lessons from past failures.
Revamping Programming and Leadership
To regain viewership and attract new audiences, CNN is also overhauling its programming lineup for both domestic and international channels. This effort coincides with the start of Donald Trump’s second term as U.S. president, a political era expected to generate significant news interest.
The network has brought on experienced executives to guide its transformation. Alex MacCallum, former revenue chief at The Washington Post, joined CNN as executive vice president of digital products and services, tasked with developing new digital offerings and subscription models. Additionally, Philip Rucker, previously the national editor at The Washington Post, was hired as senior vice president of editorial strategy and news.
These changes aim to strengthen CNN’s editorial and digital capabilities while adapting to audience preferences for on-demand, mobile-friendly content.
CNN’s restructuring comes against a backdrop of financial difficulties. The network reported $1.8 billion in revenue and $400 million in net income for 2023, a decline from $2.2 billion and $600 million in 2021.
The company also recently settled a defamation lawsuit filed by U.S. Navy veteran Zachary Young. A jury found CNN liable for defamation, but the case was resolved before punitive damages could be awarded. During the trial, CNN’s lawyers painted a grim picture of the network’s future, citing the ongoing decline of linear cable news and the urgency of transitioning to digital platforms.
CNN’s challenges reflect broader trends in the media industry, where traditional outlets are increasingly struggling to compete with digital-first platforms. As audiences turn to smartphones and streaming services for news, legacy media organizations must adapt or risk becoming obsolete.
Thompson’s vision for CNN includes a multi-year effort to reposition the network as a digital-first brand. By investing in new technologies, reshaping its programming, and introducing subscription models, CNN hopes to regain its footing in a rapidly changing media landscape.
While the success of these initiatives remains uncertain, the network’s willingness to innovate and pivot signals a recognition of the profound shifts reshaping the news industry. For CNN, the path forward will require balancing experimentation with its commitment to journalistic integrity and audience trust.
