Layoffs coming to 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.