AT&T is planning 1000’s of layoffs at HBO, Warner Bros., the remainder of WarnerMedia
Enlarge /. The AT&T logo at its corporate headquarters in Dallas, Texas on March 13, 2020.
AT&T is planning thousands of layoffs at HBO, Warner Bros. and other parts of WarnerMedia to cut costs by up to 20 percent, the Wall Street Journal reported yesterday.
WarnerMedia was formerly known as Time Warner Inc. before AT&T bought the entertainment company in 2018. Layoffs and cost cutting are generally nothing new to AT&T, including WarnerMedia. But WarnerMedia has had a particularly big hit since the pandemic began. AT&T laid off around 600 WarnerMedia employees in August, a prelude to the new cuts announced yesterday. The journal wrote:
AT & T's WarnerMedia is restructuring its workforce to cut costs by up to 20 percent as the coronavirus pandemic weighs on revenue from movie tickets, cable subscriptions and television advertising, according to people familiar with the matter.
The overhaul, which is expected to begin in the coming weeks, would result in thousands of layoffs in Warner Bros. studios and television channels like HBO, TBS, and TNT.
WarnerMedia told the Journal that it has been severely affected by the pandemic and plans to reorganize to focus on growth opportunities. "We are in the middle of this process and there will be increased investments in priority areas and unfortunately reductions in other areas," said WarnerMedia. WarnerMedia had nearly 30,000 employees earlier this year.
We have asked AT&T and its WarnerMedia division for more details on the layoffs and will update this article when we receive a response.
Shortly after purchasing Time Warner, AT&T said that HBO needed to ramp up production of original content, despite the fact that the network has had success with a smaller, high-quality series of shows and films in the past. The heads of HBO and Turner left the company as part of a reorganization in 2019.
Decline in WarnerMedia sales and AT&T share price
AT&T will post a profit for the third quarter later this month. In its earnings report for the second quarter of 2020, AT&T said HBO sales were $ 1.6 billion, down 5.2 percent year over year. Warner Bros. sales were $ 3.3 billion, down 3.9 percent. Turner sales were $ 3 billion, down 12.4 percent.
The NBCUniversal Divisions of Comcast and Disney also issued layoffs during the pandemic.
AT&T is fighting on several fronts. The company has lost more than 7 million TV customers since mid-2018. The ongoing attempt to sell DirecTV has so far resulted in offers that represent about a third of the amounts AT&T paid for the satellite company in 2015. In broadband, AT&T has stopped selling DSL to new customers and laying off thousands of network technicians instead of expanding the fiber optic home network.
As the Journal noted, "AT&T shares are down around 28 percent this year, lagging behind competitors like Comcast, and missing the stock market's record run."