Warner media layoffs

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The merger of WarnerMedia and Discovery has at least $3 billion in 'cost synergies,' a phrase that often means layoffs

  • The merger of AT&T's WarnerMedia with media company Discovery includes at least $3 billion of annual "cost synergies."
  • AT&T didn't detail these cost cuts when it announced the merger on Monday.
  • Cost "synergies" often mean layoffs.

US telecom giant AT&T on Monday announced it would merge its content unit WarnerMedia with media company Discovery, creating a new streaming giant that could go head-to-head with Netflix and Disney.

In the press release, AT&T highlighted that the deal had "at least $3 billion in expected cost synergies annually." These "synergies," or cost reductions, would allow the newly formed company to invest in its content and scale its business, AT&T said.

Cost "synergies" are a common feature of big deals, especially when companies have overlapping operations, as is the case with WarnerMedia and Discovery. They can take many forms, including layoffs, the consolidation of suppliers, or the sharing of office space.

WarnerMedia — which includes HBO, TNT, CNN, and Warner Bros. — and Discovery both have entertainment and news assets. Both have streaming platforms: HBO Max for WarnerMedia, and Discovery Plus for Discovery. 

AT&T did not detail the cost savings when it announced the deal Monday. Insider has reached out to AT&T and Discovery for comment.

AT&T shareholders would receive stock equating to 71% of the new company, while Discovery shareholders would own 29%, the companies said in the press release. 

Sours: https://www.businessinsider.com/att-warnermedia-discovery-streaming-deal-3-billion-synergies-job-cuts-2021-5

AT&T’s WarnerMedia begins new round of layoffs amid reorganization

WarnerMedia is being hit with deep job cuts this week as Chief Executive Jason Kilar makes sweeping changes to the AT&T-owned entertainment company.

More than 1,000 people are expected to be laid off in the latest round of staff reductions at the New York-based media giant, according to people familiar with the matter who were not authorized to comment. The cuts will hit 5% to 7% of staff, meaning 1,250 to 1,750 people. WarnerMedia currently employs about 25,000, the sources said.

WarnerMedia did not confirm how many jobs are being cut or share details about which departments would be most heavily hit, but the layoffs are expected to be wide-ranging.

Kilar informed staff of the coming layoffs in an early morning memo, saying the company would reveal which jobs in North America would be affected starting Tuesday. He said the company is continuing to review changes in its non-U.S. businesses, and the timing of those moves will depend on local government regulations.

“Today, we have arrived at a number of difficult decisions that are resulting in a smaller WarnerMedia team,” Kilar said in the email. “Nothing about this is easy. But please know, these reductions are not in any way a reflection of the quality of the team members impacted, nor their work. It is simply a function of the changes I believe we must make in order to best serve customers.”

Job losses were expected. The cuts come after WarnerMedia in August shed about 600 workers, primarily from its Burbank-based Warner Bros. studio, known for “Wonder Woman,” “The Big Bang Theory” and the Harry Potter movie franchise. Departing high-level studio executives in that round included Warner Bros. motion picture distribution chief Ron Sanders, worldwide television distribution chief Jeffrey Schlesinger and Chief Financial Officer Kim Williams.

The corporate upheaval continued in October as TV chairman Peter Roth announced his retirement after more than two decades at the studio. He will be replaced by Channing Dungey, a former Netflix and ABC executive, who will take over as chairman of Warner Bros. Television early next year.

The Times and other outlets last month reported that WarnerMedia was looking for additional cost savings amid the COVID-19 pandemic that has upended entertainment since March.

The company — known for storied brands including the Warner Bros. film and TV studio, HBO and TV networks such as TBS and CNN — is hemorrhaging jobs as it reorganizes itself to stay competitive in the streaming era of entertainment.

Kilar, formerly head of streaming service Hulu, became WarnerMedia’s CEO in May, replacing John Stankey, who was promoted to CEO of AT&T. The Dallas-based telecommunications firm acquired the assets of Time Warner Inc. and rebranded them as WarnerMedia in 2018, after a protracted battle with U.S. antitrust regulators.

Since then, the company has made major changes to its corporate structure and ousted well-known media veterans. In August, WarnerMedia removed two top TV programmers: Bob Greenblatt and Kevin Reilly.

WarnerMedia has placed a high priority on its new streaming service HBO Max, which launched in May.

The service, which costs $15 a month for subscribers, got off to a tepid start in terms of subscriptions. Its price point is higher than competitors including Walt Disney Co.'s Disney+ and Netflix. AT&T in October said it had added 8.6 million HBO Max subscribers since its launch, in a sign that the offering is building some momentum. HBO and HBO Max now have a combined 38 million subscribers in the U.S.

WarnerMedia is trying to adapt to dramatic changes in the media and entertainment industry that have been accelerated by the COVID-19 pandemic. Those trends, which have played out across the industry, include a reduced emphasis on theatrical films and traditional cable networks and an increased reliance on direct-to-consumer services.

The pandemic, which is surging in the U.S., has kept half of the nation’s movie theaters closed, forcing studios to delay their big films to 2021 or move them to streaming services. Warner Bros.'s superhero sequel “Wonder Woman 1984" is still planned for a Christmas theatrical release, but its position is precarious without cinemas open in Los Angeles and New York.

The coronavirus has also made it both difficult and expensive for film and TV sets to resume production, due to strict health and safety protocols in place.

Disney has cut tens of thousands of jobs in recent months, including 28,000 parks, experiences and consumer products workers, as Disneyland Resort in Anaheim remains closed and attendance at Walt Disney World in Florida lags. Burbank-based Disney has also shed 500 jobs from sports cable giant ESPN and eliminated several hundred open positions from its film studio. Santa Monica-based Lionsgate last week cut 15% of its 450-person film unit.

WarnerMedia will hold an all-hands meeting Wednesday to give more information to employees. Kilar said in his note that impacted employees will receive severance and healthcare packages and have access to “professional services and team member assistance programs.”

“To our colleagues who are leaving, I wish there were words to lessen today’s pain. Your contributions are a permanent part of this great company and today’s news does not change that,” Kilar wrote. “I am extremely thankful for all that you have done for this team and this mission. I hope that at some point you will look back on all of it with immense pride.”

Sours: https://www.latimes.com/entertainment-arts/business/story/2020-11-10/att-warnermedia-begins-new-round-of-layoffs-amid-reorganization
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WarnerMedia Chief Informs Staff of Significant Layoffs Amid Streaming Restructure

WarnerMedia is laying off employees today as part of its ongoing reorganization to cut costs amid the novel coronavirus pandemic and reorient its business around streaming.

The cuts, which are expected to hit its North American business units, come after newly installed CEO Jason Kilar announced in August a comprehensive reorganization that would consolidate its content divisions under Warner Bros. chief Ann Sarnoff. Between 5 percent and 7 percent of WarnerMedia’s 25,000 employees are expected to be let go, according to a source familiar with the matter. That equates to as many as 1,750 employees.

“Today, we have arrived at a number of difficult decisions that are resulting in a smaller WarnerMedia team,” Kilar wrote in a memo to staff obtained by THR.

The company has already seen several high-profile executive comings and goings since the reorg was first announced. WarnerMedia entertainment chairman Bob Greenblatt and TBS, TNT and TruTV president Kevin Reilly both exited in August. In October, Warner Bros. TV Group chairman Peter Roth announced that he would be leaving the company in early 2021. Channing Dungey will replace him in the role after a stint at Netflix.

Layoffs have been rolling through WarnerMedia since August. In Los Angeles County alone, Warner Bros. Entertainment cut 550 jobs, according to notices filed with the state of California in August that listed an effective date of Nov. 14. In September, meanwhile, the company shuttered CNN digital venture Great Big Story.

But more sizable cuts were expected as part of the reorganization, which is part of an effort at the company to reorient around newly launched streamer HBO Max. Kilar confirmed that cuts were coming in an Aug. 7 interview with THR. “Obviously there will be layoffs just given the nature of what we’re doing here,” he said at the time.

Among those let go Tuesday was Warner Bros. TV communications veteran Scott Rowe, who had been with the company for 27 years. Lisa Gregorian, who ran marketing for WBTV, announced her departure from the group Monday. A source says that though Sarnoff asked the 30-year company veteran to stay, Gregorian opted to leave in response to her department being gutted in the reorganization.

On the film side, Warner Bros. co-president of marketing JP Richards also received a pink slip, representing the highest-ranking person at the studio to lose a job. Jim Gallagher, who joined Warner Bros. last year in the newly created role of executive vp of marketing, animation and family, was laid off as well. The film division, which has been rocked by the coronavirus pandemic, scuttling release plans for the past several months, was otherwise not the hardest hit division at WarnerMedia.

When AT&T acquired the former Time Warner business for $85 billion in 2018, it assumed control over an unwieldy collection of content production and distribution arms that served as mini fiefdoms. Though the company has worked to streamline those units over the years, the launch of HBO Max in May has forced leadership to reconsider how its operations work together. The service, which combines programming from across the WarnerMedia content universe, had 28.7 million total subscribers but just 8.6 million activated users at the end of the third quarter. Combined, HBO and HBO Max have 38 million U.S. subscribers.

In his note to staff on Tuesday, Kilar acknowledged the uncertainty that has hung over the heads of many WarnerMedia employees since August. “While I anticipate that organizationally, things will settle down materially in the weeks and months to come (we’ve worked hard to make this a process with a beginning, middle and an end),” he wrote, “I don’t want to suggest that our future is static.”

He addressed employees in a virtual town hall Wednesday afternoon.

Tatiana Siegel contributed to this report.

Nov. 11, 5:52 p.m. Updated with additional information about those laid off.

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Sours: https://www.hollywoodreporter.com/business/business-news/warnermedia-chief-informs-staff-of-significant-layoffs-amid-streaming-restructure-4090624/
WarnerMedia LAYOFFS at DC Comics, Cartoon Network, Full Screen and Ellen!

WarnerMedia Begins New Round of Layoffs Amid Restructuring

WarnerMedia has initiated a new round of layoffs.

In a memo circulated Tuesday morning, CEO Jason Kilar wrote, “Today, we have arrived at a number of difficult decisions that are resulting in a smaller WarnerMedia team. This is a function of removing layers and the impact of consolidating previously separate organizations. Starting today in North America, we will be sharing which jobs are being eliminated and which roles have changed.”

News of the cuts comes weeks after the Wall Street Journal first reported that the company was looking to cut costs by as much as 20% and potentially lay off thousands of workers. Sources tell Variety that the number of jobs affected will be lower than that story and subsequent reports indicated, affecting 5-7% of its total workforce.

The company comprising what were once largely autonomous business units Warner Bros., HBO and Turner Broadcasting has undergone several waves of layoff since its acquisition by AT&T was completed in 2018. That deal left the telecom giant saddled with $151 billion in debt.

Kilar has set a company-wide town hall for Wednesday to discuss the latest restructuring.

A veteran of Hulu and Amazon, Kilar came aboard as the new CEO of WarnerMedia in April, amid a transition that saw predecessor John Stankey move up to the chief executive spot at AT&T. Kilar moved quickly to enact significant structural changes. In August, top executives Bob Greenblatt and Kevin Reilly, tasked with overseeing content for the company’s nascent HBO Max streaming service, were ousted.

AT&T reported last month that HBO and HBO Max had reached a combined 38 million subscribers, exceeding the company’s year-end goal of 36 million.

Read the full memo from Kilar below:

Team-

This is a very painful email to write. And for a number of you reading this, I realize it will be even more painful to receive. For this, I am sorry.

In August, I first shared news about how we were going to meaningfully change the organizational structure of WarnerMedia (which entailed, among other items, simplifying how we organize our entertainment studios, elevating HBO Max, and consolidating our commercial activities into one organization). Many of you have patiently waited to hear how the reorganization would affect you personally, which is both uncomfortable and stressful. Reducing this period of uncertainty was one of the many reasons we pushed so hard to get through this work as quickly and as thoughtfully as possible, although it probably didn’t feel fast enough. I want to thank you all for continuing to contribute your best, despite this challenging period and the additional pressure of everything else that has been going on in the world.

I’ve previously shared how critical it is for us to evolve how we operate in the context of best serving customers. As I mentioned a few months ago, this entails simplifying how we are organized, partnering with the very best storytellers, and leaning into world class product and technology as we share our stories directly with audiences across the globe. Our journey entails continuing to excel in our large, core businesses while at the same time investing in emerging businesses where we have the opportunity to meaningfully delight customers.

Today, we have arrived at a number of difficult decisions that are resulting in a smaller WarnerMedia team. This is a function of removing layers and the impact of consolidating previously separate organizations. Starting today in North America, we will be sharing which jobs are being eliminated and which roles have changed. We are continuing to review proposed changes in other countries across our non-US businesses, the timing of which will vary according to local regulatory requirements. Nothing about this is easy. But please know, these reductions are not in any way a reflection of the quality of the team members impacted, nor their work. It is simply a function of the changes I believe we must make in order to best serve customers. For those impacted, we will be offering severance and healthcare packages, in addition to professional services and team member assistance programs.

While I anticipate that organizationally, things will settle down materially in the weeks and months to come (we’ve worked hard to make this a process with a beginning, middle and an end), I don’t want to suggest that our future is static. Rather, our future is about inventing ever better ways to move the world through story … which entails embracing change. I have every confidence in this world class team to do just that.

Please join me in a Town Hall tomorrow at 2:00pm ET/11:00am PT where I will try and answer as many of your questions as possible. You can start to send your questions here.

To our colleagues who are leaving, I wish there were words to lessen today’s pain. Your contributions are a permanent part of this great company and today’s news does not change that. I am extremely thankful for all that you have done for this team and this mission. I hope that at some point you will look back on all of it with immense pride.

Until then, please stay well and safe.

Jason

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Sours: https://variety.com/2020/tv/news/warnermedia-begins-new-round-of-layoffs-amid-restructuring-1234826973/

Media layoffs warner

As WarnerMedia Braces for Massive Layoffs, HBO Max Is Both the Cause and the Cure

WarnerMedia is preparing to enact a wave of layoffs that will result in thousands of employees in the company’s film and television teams losing their jobs, but COVID-19 isn’t the only culprit. Industry analysts tell IndieWire that although all entertainment companies are impacted by the coronavirus pandemic, Warner is in acute financial difficulties after the underwhelming launch of WarnerMedia’s HBO Max streaming service as well as a lack of box-office revenue, reduced income from cable subscriptions, and television advertising.

First reported by The Wall Street Journal October 8, the AT&T-owned company plans a restructuring that will cause job losses at Warner Bros. studios and television channels such as HBO, TBS, and TNT. The impending layoffs are part of an effort to reduce the company’s costs by up to 20 percent.

“Like the rest of the entertainment industry, we have not been immune to the significant impact of the pandemic,” a WarnerMedia spokesperson said in a statement to IndieWire. “That includes an acceleration in shifting consumer behavior, especially in the way content is being viewed. 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.”

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Though WarnerMedia is not the only entertainment company to lay off a large number of employees during the coronavirus pandemic — Disney laid off around 28,000 in its parks and resorts business in late September, while NBCUniversal axed “less than 10 percent” of its 35,000-person team in August — WarnerMedia previously laid off around 800 employees between Warner Bros. and HBO in August. This second wave comes after months of troubles for the company.

HBO Max launched in May and had around 4.1 million subscribers about a month after launch according to WSJ. That paled next to subscription numbers for Disney+ and Netflix, and did not offset declines at WarnerMedia cable networks such as TNT, TBS, and TruTV.

WarnerMedia made significant investments in HBO Max prior to launch. In the company’s January earnings report, AT&T chief financial officer John Stephens told investors that investments in HBO Max reduced AT&T’s Q4 2019 revenue by $1.2 billion. However, Brad Gastwirth, chief technology strategist at Wedbush Securities, said consumers have flocked to competing streamers in recent months.

“WarnerMedia may be looking and relying too much on the old HBO brand name and not recognizing the new wave of consumption,” Gastwirth said in an interview. “If you look at Netflix, Hulu, and other streaming services, there is a significant amount of content that is more differentiated than HBO Max, while Disney+ is open to a whole new consumer group that is more kid-based, which HBO Max doesn’t really target. When you add the $15 per month cost of HBO Max and compare it to other services, consumers look at other platforms as more attractive.”

HBO Max struggles to achieve market penetration; it’s unavailable on Roku and Amazon Fire TV, which control most of the connected TV market. It also faces confusing and oblique branding issues. When HBO Max launched in May, there were three other, separate HBO products — HBO the premium cabler, HBO Go (which allowed you stream HBO content on your phone and other devices), and HBO Now (an HBO subscription without a cable package). Only in July did HBO announce that it would retire HBO Go, and rebrand HBO Now to HBO.

According to Doug Clinton, managing partner of tech VC fund Loup Ventures, the company’s efforts were too little, too late. By the time a new streaming service launches, he said, it’s crucial for consumers to have a clear understanding of what it offers.

“Part of the problem is that customers still don’t understand the difference between HBO Max, HBO Now, and HBO Go,” Clinton said. “Netflix, if I make a simple comparison, has one product. For streaming services, your biggest rush of new subscribers will come at launch and customers were dealing with that confusion at launch. Even after getting rid of HBO Go and rebranding HBO Now, they still have to re-engage with potential subscribers.”

WarnerMedia also faced challenges in the film industry, as the coronavirus pandemic has forced most movie theater chains to close. The company distributed Christopher Nolan’s expensive “Tenet” to theaters and while the film was not a global box-office bomb, it failed to attract large audiences in North America. In the weeks following the premiere of “Tenet,” WarnerMedia delayed the theatrical premieres of other high-budget films such as “Dune,” “Wonder Woman 1984,” and “The Batman.”

Gastwirth and Clinton agreed that, like most other entertainment companies that rely on box-office revenue, WarnerMedia has failed to adequately adapt to the nationwide theater closures. Both cited Disney’s release of “Mulan” on Disney+ as an example of how film distributors could circumvent at least some of the financial challenges posed by Americans’ unwillingness to visit movie theaters. Disney has not provided data on the release of “Mulan” on Disney+ but IndieWire’s Tom Brueggemann reported in September that early signs suggested that the film, which Disney+ subscribers can view for $30 (the film will become free for subscribers on December 4), has enjoyed strong viewership numbers.

“The ‘Tenet’ box office was a disappointment, but we should have expected the worst in retrospect,” Clinton said. “There’s been a shift from movie theaters and amusement parks to things at home, like streaming services, video games, and social media. Given the environment, we should recognize the reality that customers have adapted to the new life in the pandemic and are making media choices in line with that.”

There is no quick solution for WarnerMedia or other entertainment companies to reverse their fortunes. As streaming video continues to increase in popularity, Gastwirth said that it will be critical for WarnerMedia to draw customers to HBO Max, especially given the company’s investment in the platform.

“People are looking for news shows and some of these traditional TV channels aren’t getting the same viewership that they were previously,” Gastwirth said. “I think WarnerMedia needs to come up with a new marketing plan to establish users for HBO Max. It could be a lack of marketing or a lack of overall content, (but) WarnerMedia needs to have more of a hook to get people on their streaming service.”

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Sours: https://www.indiewire.com/2020/10/warnermedia-layoffs-hbo-max-1234591828/
We Are WarnerMedia

WarnerMedia Starts New Wave Of Layoffs, As CEO Jason Kilar Calls Process “Painful”

A significant round of layoffsforecast last month at WarnerMedia is getting under way today. CEO Jason Kilar emailed staffers this morning, acknowledging the process is “painful” but also calling it a “critical” step in the AT&T division’s evolution. (See his full memo below.)

The entertainment outfit has seen multiple staff reductions since the acquisition of Time Warner closed in 2018. Historically, its three main units — HBO, Warner Bros and Turner — operated as mostly autonomous groups. Now, synergy is the mission, with teams being blended for the first time in decades and a lot of positions eliminated in the process. AT&T is laboring to reduce its $151 billion debt load.

COVID-19 has certainly taken a toll on revenue from theatrical film releases and TV advertising, but in large part the layoffs are part of a strategic revamp that has been long in the works.

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Jim Gallagher To Leave EVP Marketing Animation & Family Post At Warner Bros As Part Of WarnerMedia Restructure

Initial reports that 20% to 30% of costs will be eliminated in the new round of layoffs are too high, insiders insist, though the force of the reductions is sure to be felt across the organization. A town hall has been called for Wednesday. Kilar’s memo did not allude to any specific numbers or individuals.

Kilar, the former Amazon exec and founding Hulu CEO who took over WarnerMedia in May, oversaw a previous round of cuts in August in which about 600 jobs were eliminated. That wave was notable because it saw the two principal content chiefs of streaming service HBO Max — Bob Greenblatt and Kevin Reilly — depart the company.

The launch of HBO Max, the last in a series of billion-dollar bets on direct-to-consumer streaming was not a roaring success out of the gate. AT&T said last month that 8.6 million subscribers have now activated their accounts, however, a number the company says is slightly ahead of its projections. The target by 2025 is 50 million U.S. subscribers, and 75 million to 90 million globally. In combination with legacy subscriptions, HBO all together has surpassed 38 million total subscribers and execs have, not surprisingly, emphasized the combined number.

In 2021, HBO Max will add a lower-priced tier while also expanding internationally.

Here is Kilar’s full memo:

Team-

This is a very painful email to write. And for a number of you reading this, I realize it will be even more painful to receive. For this, I am sorry.

In August, I first shared news about how we were going to meaningfully change the organizational structure of WarnerMedia (which entailed, among other items, simplifying how we organize our entertainment studios, elevating HBO Max, and consolidating our commercial activities into one organization). Many of you have patiently waited to hear how the reorganization would affect you personally, which is both uncomfortable and stressful. Reducing this period of uncertainty was one of the many reasons we pushed so hard to get through this work as quickly and as thoughtfully as possible, although it probably didn’t feel fast enough. I want to thank you all for continuing to contribute your best, despite this challenging period and the additional pressure of everything else that has been going on in the world.

I’ve previously shared how critical it is for us to evolve how we operate in the context of best serving customers. As I mentioned a few months ago, this entails simplifying how we are organized, partnering with the very best storytellers, and leaning into world class product and technology as we share our stories directly with audiences across the globe. Our journey entails continuing to excel in our large, core businesses while at the same time investing in emerging businesses where we have the opportunity to meaningfully delight customers.

Today, we have arrived at a number of difficult decisions that are resulting in a smaller WarnerMedia team. This is a function of removing layers and the impact of consolidating previously separate organizations. Starting today in North America, we will be sharing which jobs are being eliminated and which roles have changed. We are continuing to review proposed changes in other countries across our non-US businesses, the timing of which will vary according to local regulatory requirements. Nothing about this is easy. But please know, these reductions are not in any way a reflection of the quality of the team members impacted, nor their work. It is simply a function of the changes I believe we must make in order to best serve customers. For those impacted, we will be offering severance and healthcare packages, in addition to professional services and team member assistance programs.

While I anticipate that organizationally, things will settle down materially in the weeks and months to come (we’ve worked hard to make this a process with a beginning, middle and an end), I don’t want to suggest that our future is static. Rather, our future is about inventing ever better ways to move the world through story … which entails embracing change. I have every confidence in this world class team to do just that.

Please join me in a Town Hall tomorrow at 2:00pm ET/11:00am PT where I will try and answer as many of your questions as possible. You can start to send your questions here.

To our colleagues who are leaving, I wish there were words to lessen today’s pain. Your contributions are a permanent part of this great company and today’s news does not change that. I am extremely thankful for all that you have done for this team and this mission. I hope that at some point you will look back on all of it with immense pride.

Until then, please stay well and safe.

Jason

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Sours: https://deadline.com/2020/11/warnermedia-starts-new-wave-of-layoffs-as-ceo-jason-kilar-calls-process-painful-1234612107/

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