WarnerMedia began reducing its workforce on Monday, laying off at least 600 employees as movie theaters shut down and streaming competition destroyed their film and TV business.
Most of the cuts came from the legendary Warner Bros. studio in Burbank, known for ‘Wonder Woman’, ‘The Big Bang Theory’ and the Harry Potter film franchise. High school studio administrators fired Ron Sanders, Warner Bros. motion department chief; Jeffrey Schlesinger, global head of television distribution; and Kim Williams, the studio’s financial officer.
The purge comes amid a period of unrest for the media company, which was acquired two years ago by telecommunications giant AT&T. The reorganization is the second shakeup of management since the Dallas company took control. Since then, COVID-19 orders to stay home have ceased the film business, and major studio releases, including Christopher Nolan’s highly anticipated sci-fi thriller “Tenet,” have been delayed. Analysts said U.S. cash receipts could be as high as 70% this year compared to last year. Plans now include the release of “Tenet” abroad ahead of a hopeful September debut in the US
The pandemic also called for a temporary shutdown of TV and film production, which means there are fewer projects in the pipeline, causing revenue to continue to plummet.
The hope-on silver bullet – the HBO Max streaming service – has been launched after a slow start.
While 26 million HBO subscribers have access to HBO Max, the service had only 4.1 million subscribers at the end of June. The company assured investors that 10 million subscribers would have HBO Max at its launch in May. In contrast, more than 10 million consumers have downloaded the app for Peacock, a competing streaming service launched by NBCUniversal last month.
WarnerMedia CEO Jason Kilar, who joined the company in May, is seeking to streamline the organization. On Friday, he surprised Hollywood by launching two top TV shows: Bob Greenblatt, who was chairman of WarnerMedia Entertainment, including HBO; and Kevin Reilly, who was chief content officer for HBO Max and program manager of the Turner channels. Greenblatt had only been in his position for 18 months; he was hired last year by John Stankey, now head of AT&T, to oversee the company’s TV channels, including HBO, and the HBO Max service.
“Kilar is following the mandate on Wall Street to get efficiency,” said Eric Schiffer, CEO of Beverly Hills private equity firm the Patriarch Organization. “We see the ominously painful, yet strategic, refocus of the company to achieve that goal.”
Television channels, including HBO, also saw some cuts.
The reorganization of WarnerMedia knew a decades-old structure, in which its TV networks and Hollywood studio worked as two distinct units. Last week, NBCUniversal centralized management of its large portfolio of TVs and began substantial layoffs.
As part of the consolidation, Warner Bros. CEO Ann Sarnoff, HBO Chief Casey Bloys and Chief Enterprise Inclusion Officer Christy Haubegger substantial promotions.
AT&T has struggled to realize the potential of its high-profile investments over the past five years, acquisitions that left the company with more than $ 160 billion in debt. In 2015, the company acquired DirecTV, which was then witnessing an exodus of top executives. The satellite TV operation has since lost more than 4 million subscribers. Last month, AT&T announced to California officials that it planned to permanently cut another 64 employees from its operations in El Segundo.
“She spent nearly $ 50 billion on DirecTV, and that was a failure, and then she spent $ 85 billion on Time Warner, and although it’s not a fiasco, it could go in that direction,” said Jeffrey Cole, a USC communications professor. and director of the Center for the Digital Future. ‘This is the new man who comes home and cleans. But it is also an acknowledgment that the place was a mess. Morality has been destroyed, and they plundered the HBO brand for their HBO Max streaming service – and they did not do so successfully. ”
In addition, WarnerMedia’s cable networks – TNT, TBS and Cartoon Network – have been transformed in the face of changing consumer viewing habits. The company can no longer depend on watching couch potatoes, because consumers instead watch entertainment on Netflix, Hulu, YouTube and TikTok.
Both Sanders and Schlesinger have been with the Burbank-based studio for more than 30 years. Schlesinger, who started a Warner Bros. predecessor business in 1983, had survived five previous mergers.
“It’s been a great 37-year run, with 26 as president of International Television Distribution, spending six mergers, millions of miles traveled, thousands of programs sold and billions of dollars generated,” Schlesinger said in a statement. ‘Ultimately, it took a global pandemic and a complete reorganization of the company for me to travel the latest hard. I always hope to remember myself as the only studio performer riding in the good old days at an ‘International Screenings’ party in the studio on the back of an elephant.’
Sanders said: ‘Warner Bros. is known for being the most famous studio in history for good reason. The talent is unattainable, both on the creative and business sides, and I am honored to have been entrusted with the trust of a large portfolio of companies around the world for the past 30 years. ”
Williams said in the statement that she would “cherish” her five years in the studio, which she said “was full and bright.”
