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The BBC's Mark Gregory
"The world of internet media may be about to go through similar pain"
 real 28k

Thursday, 18 January, 2001, 19:06 GMT
CNN to axe 400 jobs
CNN screen grab
CNN: Coffey is the second top executive to resign
CNN, the pioneering 24-hour cable news channel that rose to prominence during the Gulf War, said on Wednesday it was planning to cut 400 jobs, nearly 10% of its work force.

One third of the job cuts will come from its interactive unit, including and

The international message has been really positive and in fact we are expanding

CNN spokeswoman
Another third of the cuts will come from the programming division, and the remainder from other parts of the company.

In addition, Shelby Coffey III, the president of CNN's business and financial news network (CNNfn) has resigned.

Second departure

Last week, Bob Furnad, president of CNN Headline News, also left his post.

Both departures follow the merger between Time Warner, CNN's parent company, and America Online, which was completed on 11 January.

Despite the announcement, staff at Europe, in London, are not concerned.

"The international message has been really positive and in fact we are expanding, opening two new bureaux, so people here feel good at the moment," said press spokeswoman Susanna Flood.

Troubled times

CNN plans to roll the operations of its news web sites into the television channels, a strategy used by other media companies recently to cut costs.

The long-rumoured cutbacks come at a troubled time for many media companies, which are grappling with the prospect of slower advertising growth this year.

In 2000, advertising was boosted by the aggressive campaign of companies, many of which have failed in the last year.

The prospect of a slower overall economy has put pressure on advertising budgets of established companies as well.

Slowing growth

Growth in online advertising, the main revenue source for many internet news sites, is expected to slow considerably compared with last year.

"The interactive landscape has changed and we must re-examine the relationship between online and on-air editorial content," said Jim Walton, president of CNN Domestic Networks for the CNN News Group, in a statement.

CNN profile
Founded: 1980
Founder: Ted Turner
Chairman & CEO: Tom Johnson
Employees: 4,400
TV News networks: 14
Websites: 15
Radio stations: 2

News Corp followed a similar strategy earlier this month when it announced that it would consolidate its US internet media unit News Digital, into Fox Television, cutting the unit's workforce by 200.

Additionally NBC Internet Inc announced on Thursday that it will cut its work force by 30%, or 150 jobs, as a result of a revenue shortfall stemming from a softer advertising market.

"We are determined to reach profitability, but to reach this goal we needed to make difficult decisions on the operational side of our business to account for the challenges within the online advertising market," said Chief Executive, Will Lansing.

CNN rose to prominence in 1991 when it offered exclusive coverage of the Gulf War from within the borders of Iraq.

The network managed to garner high viewership ratings and cement its reputation for extensive television news during periods of crisis, such as the Oklahoma bombing and most recently the vote challenges in the state of Florida in the 2000 US presidential election.

But it has often struggled to keep viewers when those crises were resolved.

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