AT&T is planning 1000’s of layoffs at HBO, Warner Bros., and different components of WarnerMedia as a part of a plan to chop prices by as much as 20 p.c, The Wall Avenue Journal reported yesterday.
WarnerMedia is what was once known as Time Warner Inc. earlier than AT&T purchased the entertainment company in 2018. Layoffs and price cuts are nothing new at AT&T in general, together with at WarnerMedia. However WarnerMedia has taken a very massive hit for the reason that pandemic started. AT&T laid off about 600 people from WarnerMedia in August, a prelude to the brand new cuts revealed yesterday. The Journal wrote:
AT&T’s WarnerMedia is restructuring its workforce because it seeks to scale back prices by as a lot as 20 p.c because the coronavirus pandemic drains revenue from film tickets, cable subscriptions and tv adverts, in keeping with folks conversant in the matter.
The overhaul, which is predicted to start within the coming weeks, would lead to 1000’s of layoffs throughout Warner Bros. studios and TV channels like HBO, TBS and TNT, the folks mentioned.
WarnerMedia had practically 30,000 staff earlier this yr. A WarnerMedia spokesperson instructed Ars that “we’re not discussing or confirming any speculative numbers” concerning what number of jobs will likely be minimize. The job reductions are a part of the restructuring that was introduced in August, the spokesperson additionally mentioned.
“Like the remainder of the leisure trade, we now have not been proof against the numerous influence of the pandemic. That features an acceleration in shifting client conduct, particularly in the best way content material is being seen,” WarnerMedia mentioned. “We shared with our staff lately that the group will likely be restructured to reply to these adjustments and prioritize development alternatives, with an emphasis on direct-to-consumer. We’re within the midst of that course of and it’ll contain elevated investments in precedence areas and, sadly, reductions in others.”
Shortly after shopping for Time Warner, AT&T mentioned that HBO wanted to ramp up production of original content regardless of the community’s historical past of succeeding with a smaller, high-quality lineup of reveals and films. The HBO and Turner bosses left the company amid a reorganization in 2019.
Drops in WarnerMedia income and AT&T share worth
AT&T will report third-quarter earnings later this month. In its Q2 2020 earnings report, AT&T mentioned that HBO income was $1.6 billion, down 5.2 p.c yr over yr. Warner Bros. income was $3.3 billion, down 3.9 p.c. Turner income was $3 billion, down 12.4 p.c.
AT&T is struggling on a number of fronts. It has misplaced over 7 million TV clients since mid-2018, and its ongoing attempt to sell DirecTV has thus far introduced in bids valued at about one-third of what AT&T paid for the satellite tv for pc firm in 2015. On the broadband entrance, AT&T stopped selling DSL to new customers and laid off 1000’s of community technicians instead of expanding its fiber-to-the-home community.
Because the Journal famous, “AT&T shares have fallen about 28 p.c this yr, lagging behind rivals like Comcast and lacking out on the inventory market’s file run.”