WarnerMedia plans to cut 'thousands' of jobs when it cuts costs 'by up to 20%' in a restructuring because COVID has hammered film and TV business
WarnerMedia is reportedly preparing a restructuring that aims to cut costs by as much as 20 percent and would result in thousands of layoffs.
The overhaul at the AT&T Inc owned company, which is expected to begin in the coming weeks, would see job losses across Warner Bros Studios and TV channels like HBO, TBS and TNT, The Wall Street Journal reports.
A WarnerMedia spokesman told Deadline: 'Like the rest of the entertainment industry, we have not been immune to the significant impact of the pandemic.
'We shared with our employees recently that the organization will be restructured to respond to those changes and prioritize growth opportunities, with an emphasis on direct-to-consumer. We are in the midst of that process and it will involve increased investments in priority areas and, unfortunately, reductions in others.'
In April WarnerMedia named Jason Kilar, the founding chief executive of Hulu and a former Amazon senior vice president, as its new CEO
The Warner Brothers film studio lot in Burbank, California; Warner Bros. had already cut 500 jobs in August
The coronavirus sapped $2.8 billion in revenue from AT&T in its most recent quarter, mostly in its WarnerMedia TV and film division, it was reported in July.
WarnerMedia revenue fell 23 per cent to $6.8 billion due to a pullback by TV advertisers, particularly as there were no live sports, and movie theaters closed.
Warner Bros. had already cut 500 jobs in August.
It is not known exactly how many people work for WarnerMedia. The former company, acquired by AT&T 2018, had 28,000 but that figure is thought to have fallen since then.
Media companies have been hard hit by severe drops in ad sales as marketers reel in spending due to the global coronavirus outbreak.
The pandemic has also halted production of original material, starving streaming services of new content needed to fuel subscriptions.
Disney has already announced 28,000 layoffs at theme parks across the US.
In April WarnerMedia named Jason Kilar, the founding chief executive of Hulu and a former Amazon senior vice president, as its new CEO.
The choice of Kilar made clear the priority of the new streaming service for AT&T.
In August WarnerMedia executives Bob Greenblatt and Kevin Reilly, who oversaw the creation of the HBO Max streaming business, left as part of a broad restructuring focused around the streaming service, the company said.
The company is hoping to navigate the shift to online video with its HBO Max service, which launched in late May. AT&T said 4.1 million customers 'activated' a Max account after its launch.
It's not specified how many were existing HBO customers who upgraded to Max for free and how many were new customers; there are 36.3 million U.S. subscribers to HBO Max or HBO.
Warner Bros. delayed the summer release of Wonder Woman 1984 because of the pandemic
Tenet, directed by Christopher Nolan, was viewed as the main litmus test for whether audiences were ready to embrace the theatrical experience again, after nearly six months of shuttered theaters
The company said it had 'work to do to educate and motivate' HBO customers that they could switch to HBO Max, which has more content.
Hollywood shut down production due to the pandemic, delaying movie releases.
Tenet, directed by Christopher Nolan, was viewed as the main litmus test for whether audiences were ready to embrace the theatrical experience again, after nearly six months of shuttered theaters. It was considered a flop by many.
The release of Wonder Woman 1984 and The Batman have both been pushed back.