AT&T is planning 1000’s of layoffs at HBO, Warner Bros., and different elements of WarnerMedia as a part of a plan to chop prices by as much as 20 p.c, The Wall Road Journal reported yesterday.
WarnerMedia is what was once referred to as Time Warner Inc. earlier than AT&T bought the leisure firm in 2018. Layoffs and price cuts are nothing new at AT&T normally, together with at WarnerMedia. However WarnerMedia has taken a very large hit because the pandemic started. AT&T laid off about 600 individuals from WarnerMedia in August, a prelude to the brand new cuts revealed yesterday. The Journal wrote:
AT&T’s WarnerMedia is restructuring its workforce because it seeks to cut back prices by as a lot as 20 p.c because the coronavirus pandemic drains revenue from film tickets, cable subscriptions and tv advertisements, based on individuals aware of the matter.
The overhaul, which is predicted to start within the coming weeks, would lead to 1000’s of layoffs throughout Warner Bros. studios and TV channels like HBO, TBS and TNT, the individuals stated.
WarnerMedia advised the Journal that it has been considerably impacted by the pandemic and plans to reorganize to deal with development alternatives. “We’re within the midst of that course of and it’ll contain elevated investments in precedence areas and, sadly, reductions in others,” WarnerMedia stated. WarnerMedia had practically 30,000 workers earlier this yr.
We requested AT&T and its WarnerMedia division for extra particulars on the layoffs at present and can replace this text if we get any response.
Shortly after shopping for Time Warner, AT&T stated that HBO wanted to ramp up manufacturing of authentic content material regardless of the community’s historical past of succeeding with a smaller, high-quality lineup of reveals and films. The HBO and Turner bosses left the corporate amid a reorganization in 2019.
Drops in WarnerMedia income and AT&T share worth
AT&T will report third-quarter earnings later this month. In its Q2 2020 earnings report, AT&T stated that HBO income was $1.6 billion, down 5.2 p.c yr over yr. Warner Bros. income was $3.3 billion, down 3.9 p.c. Turner income was $3 billion, down 12.4 p.c.
Comcast’s NBCUniversal division and Disney have additionally imposed layoffs throughout the pandemic.
AT&T is struggling on a number of fronts. It has misplaced over 7 million TV clients since mid-2018, and its ongoing try to promote DirecTV has up to now introduced in bids valued at about one-third of what AT&T paid for the satellite tv for pc firm in 2015. On the broadband entrance, AT&T stopped promoting DSL to new clients and laid off 1000’s of community technicians as an alternative of increasing its fiber-to-the-home community.
Because the Journal famous, “AT&T shares have fallen about 28 p.c this yr, lagging behind rivals like Comcast and lacking out on the inventory market’s report run.”