Sep 12, 2022 - Economy

Layoffs coming to Warner Bros. Discovery

Warner Bros. Discovery

Hundreds of people are expected to be laid off on the business side of Warner Bros. Discovery, via a round of layoffs that will begin Tuesday, sources tell Axios.

Why it matters: Executives have warned for months that the merger between WarnerMedia and Discovery would yield roughly $3 billion in synergies.

  • Rising interest rates and a weak macro-economic climate has put pressure on media companies to be more disciplined about costs.

Details: About 30% of the combined ad sales teams across WarnerMedia and Discovery are expected to be cut over the next few weeks, sources told Axios.

  • Sources say that the cuts will be coming from both the WarnerMedia and Discovery ad sales teams.
  • The combined Warner Bros. Discovery company is roughly 40,000 people, with some 10,000 people on Discovery's side and 30,000 on WarnerMedia's in total.
  • Plans for the layoffs were first reported by The Information in June.

Catch up quick: Shortly after the deal closed in April, the company's new leadership tasked department leaders to restructure their organizations to meet cost targets.

  • The company announced in June a "Voluntary Separation Program" for certain groups within the company's U.S. ad sales organization, per a memo obtained by Axios.
  • Sources told Axios in April that the combined company's new leadership team wasn't planning to announce any major advertising layoffs until after its annual advertising presentation to advertisers in mid-May.
  • The company closed its upfront with $6 billion in ad commitments, trailing competitors like Disney and NBCUniversal, which booked $9 billion and $7 billion in upfront ad commitments, respectively.

Inside the company, employees are bracing for steep cutsnow-defunct and some teams have already experienced layoffs.

  • Hundreds of employees from CNN's now-defunct streaming service CNN+ were already laid off in April. More than two dozen HBO Max staffers were laid off in Europe last month.

The big picture: Executives at WarnerMedia Discovery have warned investors that they plan to be conservative about budgets and that their goal isn't to "win the spending war."

  • More media companies are beginning to tread carefully around budgets in light of the market free fall.
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