According to a person with direct knowledge of the matter, Time Warner Incs Turner Broadcasting cable TV unit intends to offer voluntary buyouts to between 500 and 600 senior employees this week as part of its cost reduction plan. The Turner Broadcasting division currently generates more than half of the companys operating income.
The person reported that the voluntary buyouts are to be offered to employees who are 55 and older with a certain experience in Time Warner. The buyout opportunity, which will include enhanced severance benefits, will be provided only to the companys US staff due to international labor laws.
The people targeted for the buyouts represent about 4% of the units workforce, which currently amounts to about 14 000 people. One of the sources familiar with the situation shared that the buyouts will not eliminate the need for more job cuts in the unit.
Time Warner Inc. has recently become more focused on boosting growth and investor returns as an independent entity after rejecting a $71-billion offer from Rupert Murdoch. In addition, the buyout packages are part of the companys attempt to improve Turners efficiency and to free up money for investments in programming and technology.
The “Turner 2020” plan was announced in June 2014 by Turner Broadcasting CEO Mr. John Martin who said that the plan is focused on increasing both the profitability and the efficiency of the unit.
In June, Mr. Martin wrote in a note to the divisions employees, which was cited by the Financial Times: “We’ve been shifting resources already and I would ask that you think carefully about how and where to get the greatest return on the assets you control. This may mean staff changes. In fact, I’ll be surprised if it doesn’t.”
A spokeswoman of the Turner Broadcasting unit did not immediately respond to a request to comment on the buyouts.
Time Warner Inc. fell by 0.36% down on Monday in New York to close at $76.95 per share, marking a one-year change of +29.28%. The company is valued at $66.02 billion. According to CNN Money, the 24 analysts offering 12-month price forecasts for Time Warner Inc. have a median target of $85.00, with a high estimate of $100.00 and a low estimate of $69.00. The median estimate represents a +10.46% increase from the last price of $76.95.
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