Staff Cuts Expected at Warner Bros.
A round of layoffs and buyouts is expected at the studio
Staffers at Warner Bros. are bracing for a round of buyouts and possible layoffs that are expected to hit the studio's entertainment operations. The buyouts were first reported by Bloomberg, which said that an unspecified number of workers will be offered buyouts in an effort to increase profits for parent company Time Warner.
"We don't comment on speculation," Warner Bros. spokesman Paul McGuire said.
The cuts are expected to hit across the studio's various entertainment businesses — film, TV and home entertainment — headed by Warner Bros. Entertainment CEO Kevin Tsujihara. The film studio had a particularly rough summer: During a downbeat season that saw total domestic box office decline by 15 percent for the industry as a whole, Warners faced a particularly sharp revenue drop. As of Aug. 1, its revenues was down 39.5 percent from 2013. Godzilla, the studio's top earner, grossed $507.9 million globally, while Tom Cruise's big-budget Edge of Tomorrow finished with $364 million. Disappointments included Adam Sandler's Blended and Clint Eastwood's Jersey Boys. "Our summer did not live up to our expectations," Warners distribution chief Dan Fellman told The Hollywood Reporter, "though Tammy will be profitable. We'll also have a very strong fourth quarter."
At the moment, Warners ranks third in terms of its share of 2014's domestic box office. Warners' collective take of $1.065 billion puts it behind 20th Century Fox, which is first with 17.3 percent and $1.227 billion, and Disney, which is second with 16.7 percent and $1.184 billion. Worldwide, Warners has collected $2.7 billion for the year.
However, Warners faces other, larger pressures beyond its recent box office shortfall. Time Warner recently rejected a $80-billion takeover bid from Rupert Murdoch, putting pressure on the company's CEO Jeff Bewkes, who has promised investors that he can create more value at the company. And buyouts have already began at the company's Turner division, which includes CNN and TBS.