WarnerMedia Begins Massive Round of Layoffs

Warner Bros. Entertainment Kim Williams- Ron Sanders-Getty - Split - H 2020
Presley Ann/Getty Images; Ethan Miller/Getty Images

The entertainment giant handed out hundreds of pink slips as Hollywood continues to reel amid the coronavirus pandemic.

WarnerMedia has begun a round of layoffs with the entertainment giant letting go hundreds of staffers amid the coronavirus crisis that has crippled Hollywood with shelved tentpoles and production shutdowns. Sources say the first wave of layoffs is expected to be around 600 staffers, with a heavy focus at Warner Bros. 

The laid off employees include Warner Bros. CFO Kim Williams, Warner Bros. Worldwide Television Distribution president Jeff Schlesinger and Ron Sanders, Warner Bros. president, Worldwide Theatrical Distribution & Home Entertainment and Executive Vice President, International Business Operations.

The pink slips were handed out in departments encompassing film and TV and come in the aftermath of a major restructuring at the company that saw WarnerMedia Entertainment and direct to consumer chairman Bob Greenblatt and content chief and TBS, TNT and TruTV president Kevin Reilly ousted last week. The cuts also follow a series of Hollywood layoffs and furloughs that have affected agencies like CAA and Endeavor and such studios as Universal, Disney and Lionsgate.

“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.," said Ann Sarnoff, chair and CEO of Warner Bros. and newly announced head of WarnerMedia’s Studio and Networks Group. "I thank them all for their dedication and years of service, and wish them the very best in their next chapters.”

Added Sanders: “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.”

Sources say Warners' Atlanta base, which features scores of staff in cable TV operations and marketing divisions, was especially impacted. Like other media conglomerates, redundancies with other similar departments from other divisions are among the first to go.

On the film front, Warner Bros. has not been immune to the challenges that have rocked the industry. The studio moved its highly anticipated summer film Tenet multiple times (it is opening internationally on Aug. 26, followed by a U.S. release in select cities over Labor Day weekend). The studio also bumped the Wonder Woman sequel off its original summer release date as well as the John Chu-helmed and Lin Manuel Miranda-penned musical In the Heights (the former is scheduled to open Oct. 2, and the latter moved to summer 2021).

The changes arrive as WarnerMedia, under new CEO Jason Kilar, is putting its newly launched streamer HBO Max front and center. The service, which launched May 27, was hoping to convert many of linear cable network HBO’s 30 million-plus subscribers, which costs the same amount. But HBO Max only added 1.1 million HBO customers and 3 million retail customers in its first month. The rollout was hampered by the company’s ongoing negotiations with Amazon and Roku about bringing the app to their connected TV devices. More than two months after launch, HBO Max still isn’t available on either platform.

“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 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.’”

Added Williams: “Warner Bros. has a unique and wonderful history; heralded and iconic, it is one that I am proud to have been part of. It is also filled to the brim with the best and brightest. I will cherish my time at this great company.”

The restructuring comes as legacy media companies continue to make major executive suite changes amid a landscape that increasingly places streaming as the top priority. Last week, NBCUniversal outlined a similar strategy and folded all business operations under Frances Berwick, while a search continues for an exec to oversee entertainment programming across streamer Peacock as well as NBC and the company's suite of cable networks. ViacomCBS, for its part, has also consolidated its executive ranks in the past year-plus, with Chris McCarthy adding a growing number of networks to his purview. The novel coronavirus has forced many legacy media companies to tighten costs amid declining profits, with many insiders noting the restructurings should have taken place well before the pandemic created an economic reason to do so.

The global pandemic has shuttered movie theaters from Beijing to New York as social distancing becomes the new normal across the globe. Studios including Warners have been forced to shutter production on major tentpoles like the most recent outing of Fantastic Beasts and Where to Find Them.

A number of studio parent companies had addressed the fallout from the virus crisis including WarnerMedia owner AT&T and signaled cut-cutting measures to come. On March 20, as the pandemic's fallout became more clear, the telecom giant said it was canceling planned stock buybacks, including an accelerated share repurchase agreement with Morgan Stanley to buy back $4 billion of its stock, in order to maintain financial flexibility. "The impacts of the pandemic could be material, but due to the evolving nature of this situation, we are not able at this time to estimate the impact on our financial or operational results," AT&T said.