WarnerMedia is planning another round of layoffs to reduce costs by as much as 20% as the coronavirus pandemic and streaming continue to reshape the entertainment industry.
The overhaul at the AT&T subsidiary, which houses HBO, TNT, TBS, and the Warner Bros. studio, would result in thousands of layoffs, The Wall Street Journal reported, citing people familiar with the matter.
Rivals including Walt Disney and NBCUniversal have also cut jobs in recent months as the industry struggles to cope with declining revenue from movie tickets and TV advertising. WarnerMedia eliminated more than 500 jobs at Warner Bros. in August.
“Like the rest of the entertainment industry, we have not been immune to the significant impact of the pandemic,” a WarnerMedia spokesman said, adding that the company would reorder its operations to focus on growth opportunities. “We are in the midst of that process and it will involve increased investments in priority areas and, unfortunately, reductions in others.”
The layoffs are expected to begin in the coming weeks though the company would not comment on specific numbers. WarnerMedia employed nearly 30,000 people earlier this year while AT&T, which acquired Time Warner in 2018, had a workforce of 243,000 at the end of June.
Even before the onset of the pandemic, cable networks had been suffering as cord-cutting pushes viewers toward cheaper online entertainment options. “AT&T has staked much of its media-focused strategy on HBO Max since the streaming video service launched in late May,” the Journal said.
About 4.1 million subscribers had activated the entertainment app about a month after its launch while overall HBO subscriptions, which include viewers watching the slimmer premium channel through cable TV bundles, rose to about 36 million.
But streaming growth hasn’t offset deeper declines at TNT, TBS and TruTV as advertising reels from the coronavirus, which has also shut down movie theaters, dealing a major blow to the Warner Bros. studio.
The box office results for “Tenet” were disappointing though the expensive science-fiction movie performed better abroad.