CNN may be headed for more layoffs and drastic belt-tightening when it’s jettisoned from its parent company, a move that was announced today. The executive who will lead the new, spun-off company, Gunnar Wiedenfels, is known as a bloodless and ruthless cost-cutter. 

Warner Bros. Discovery announced Monday morning that it is spinning off its cable business, including CNN. The so-called legacy television networks, while still highly profitable, have been a drag on WBD’s stock market value, as they are in a slow but terminal decline due to the public’s shift to à la carte streaming channels.

The chief executive of WBD, David Zaslav, will remain in charge of the streaming and studio business that will contain HBO, HBO Max, and Warner Bros. Motion Picture Group under a new company with a temporary name, Streaming & Studios. Meanwhile, the cable companies will be under a new company, temporarily known as Global Networks, led by Mr. Weidenfels, currently WBD’s chief financial officer. The spin-off is expected to be completed by mid-2026.

In a statement about the split, WBD said, “The separation aims to provide each company with greater strategic flexibility and focus.”

In an internal memo, Mr. Zaslav told staff, “This evolution isn’t a departure from our strategy — to deploy Max globally, optimize our global networks, and return our Studios to industry leadership — it’s about unlocking the full potential of two strong businesses.”

“Each has a distinct focus, a clear mission, and the scale to succeed on its own terms,” he added.

The decision to spin off the cable business comes as media companies have grappled with an environment in which their streaming services have seen rapid growth, while cable networks have seen falling revenues as more Americans are “cutting the cord.” 

The parent company of NBCUniversal, Comcast, announced last year that it would spin off its cable business — including MSNBC — under a new company known as Versant. That change is expected to lead to cuts at the left-wing network, as it will lose the financial support it currently gets from NBC News, which provides expensive newsgathering services. MSNBC is even being forced out of its longtime home at historic 30 Rockefeller Plaza, and may be moving back to New Jersey, where it got its start in the late 1990s and where CNBC, which is also part of Versant, has a large headquarters in Englewood Cliffs. 

While the leadership at CNN is not expected to change as a result of the deal, the decision to spin it off under a new company is likely to further layoffs at the ratings-challenged network as the leader of Global Networks, Mr. Wiedenfels,  has been a key driver of cost-cutting measures at WBD. 

Since CNN is now being bundled into a spin-off of “declining assets,” it’s also likely that Mr. Wiedenfels will seek to extract as much profit as possible from the cable network before it enters a death spiral.

Due in part to the generosity of CNN’s president between 2013 and 2022, Jeff Zucker, many of CNN’s on-camera personalities are paid several times what they would command on the open market. Hosts who reach fewer than 100,000 viewers under 55 are making seven-figure salaries. (Even Brian Stelter made about $1 million a year before his temporary ouster. He’s now believed to make far less.) On-camera salaries are expected to be slashed by Mr. Wiedenfels as contracts come up for renewal or even earlier.

CNN is consistently a distant third in the ratings race behind Fox News and MSNBC. In January, the chief executive of CNN, Mark Thompson, announced the company was laying off 6 percent of its workforce, or more than 200 employees, which it said was part of an effort to “shift CNN’s gravity towards the platforms and products where the audience themselves are shifting,” to focus on more on its digital operations. Mr. Thompson said CNN planned to hire people for the digital-focused roles. Those layoffs came after the network cut 100 people from its workforce last summer. 

Global Networks and, as a result, CNN could expect to see more layoffs. During a call with investors, Mr. Wiedenfels was asked about the potential layoffs, and he responded, “We will continue to be very focused on efficiency.”

Three years ago, when Mr. Wiedenfels became the CFO of WBD, he made headlines for his commitment to cut $3 billion in costs at the company. In June 2022, the WBD cut 30 percent of its global advertising sales team, or 1,000 jobs. 

A veteran media reporter, Matthew Belloni, wrote in 2022 that Mr. Zaslav “fell in love” with Mr. Wiedenfels, a German former management consultant for the prestigious firm McKinsey, after the latter helped orchestrate the acquisition of Scripps and found ways to eliminate $1 billion in costs when “the company only expected $350 million.”

“For a year now, I’ve heard story after story of reality series whose productions were squeezed by Discovery. Big stars, too. Or at least big for Discovery. The M.O. is that Zaslav plays the magnanimous supporter, then either Gunnar, or networks chief Kathleen Finch, or dealmaker Bruce Campbell, drops the hammer,” Mr. Belloni wrote. “A few episodes cut here, a location trip eliminated there. Gunnar was behind that incredibly unpopular shift a few years ago to make producers take out loans to fund their own shows.”

CNN is heading into this new period of financial uncertainty with a dire outlook for its ratings. During President Trump’s first term in office, CNN saw a ratings boost. Between the 2020 election and Mr. Trump’s last day in office, the network averaged 2.5 million viewers during the primetime hours. 

However, Mr. Trump’s second term is not providing any kind of boost to CNN. In May, it averaged just 426,000 viewers during its primetime hours and just 76,000 in the coveted 25- to 54-year-old demographic. 

Some media observers have speculated that the WBD breakup will open the door for other deals and potential mergers of cable companies, which could, in theory, lead to more stability for struggling cable networks. In the meantime, CNN’s ratings nosedive will likely lead executives at Global Networks to try to find ways to trim costs, including even more layoffs. 

CNN did not provide a comment by the time of publication.