WarnerMedia began slashing its workforce Monday, with plans to lay off at least 600 employees as movie theater shutdowns and streaming competition ravage its film and TV business.
The most high-profile job cuts came from the legendary Warner Bros. studio in Burbank, known for “Wonder Woman,” “The Big Bang Theory” and the Harry Potter movie franchise. Among those cut were high-level studio executives Ron Sanders, Warner Bros. motion picture distribution chief Jeffrey Schlesinger; and Kim Williams, the studio’s chief financial officer.
The purge comes amid a period of turmoil for the media company, which was acquired by telecommunications giant AT&T two years ago. Since then, COVID-19 stay-at-home orders upended the movie business, and major studio releases, including Christopher Nolan’s highly anticipated sci fi thriller “Tenet,” have been delayed. Analysts say U.S. box office receipts this year could be down as much as 70% compared to last year. Plans now include releasing “Tenet” overseas before a hoped-for September debut in the U.S.
The Warner Bros. studio announced that the three veteran executives would be leaving as part of the reorganization.
“Jeff, Ron and Kim are all highly valued members of my senior leadership team, and we will be forever grateful for the many meaningful and lasting contributions each of them has made to Warner Bros.,” Warner Bros. Chair and CEO Ann Sarnoff said in a statement. “I thank them all for their dedication and years of service, and wish them the very best in their next chapters.”
The pandemic also prompted the temporary shutdown of TV and film production, which means there are fewer projects in the pipeline, further eroding revenues.
Additionally, WarnerMedia’s cable television networks, TNT and TBS, also have been reeling amid changing consumer viewing habits. They no longer can depend on couch-potato viewing as consumers instead watch entertainment on Netflix, Hulu, YouTube and TikTok.
Meanwhile, the company’s hoped for silver bullet — the HBO Max streaming service — has gotten off to a sluggish start. Although AT&T last year assured investors that 10 million subscribers would have HBO Max at launch, only 4.1 million customers have signed up by the end of June, the company reported. In contrast, more than 10 million consumers have downloaded the app for Peacock, a competing streaming service from NBCUniversal that launched last month.
HBO also is expected to shoulder some of the cuts.
WarnerMedia’s recently installed CEO Jason Kilar is looking to streamline the company. On Friday, he surprised Hollywood by ousting two top TV programmers: Bob Greenblatt, who was chairman of WarnerMedia entertainment, including HBO; and Kevin Reilly, who was chief content office for HBO Max. As part of the consolidation, Sarnoff, HBO Chief Casey Bloys and Chief Enterprise Inclusion Officer Christy Haubegger got substantial promotions.
Both Sanders and Schlesinger had been with the studio for more than 30 years. Schlesinger, who began with a Warner Bros. predecessor company in 1983, had survived five previous mergers.
“It’s been a great 37 year run, with 26 as president of International Television Distribution, spanning six mergers, millions of miles traveled, thousands of programs sold and billions of dollars generated,” Schlesinger said in a statement. “In the end, it took a global pandemic and a complete reorganization of the company for me to trip over the last hurdle. I hope to always be remembered as the only studio executive to ride into an International Screenings party at the studio on the back of an elephant in the ‘good old days.’”
Sanders, for his part, added: “Warner Bros. is known for being the most celebrated studio in history for good reason. The talent is unmatched, both on the creative and business sides, and I’m honored to have been entrusted to oversee a great portfolio of businesses around the world for the last 30 years.”
Williams, in the statement, said she would “cherish” her time at the studio, which she said was “filled to the brim with the best and brightest.”