WarnerMedia Chief Informs Staff of Significant Layoffs Amid Streaming Restructure

Jason Kilar - Publicity - H 2020
Julie Cahill Photography

The cuts are expected to hit between 5 percent and 7 percent of WarnerMedia's 25,000 employees.

WarnerMedia is laying off employees today as part of its ongoing reorganization to cut costs amid the novel coronavirus pandemic and reorient its business around streaming.

The cuts, which are expected to hit its North American business units, come after newly installed CEO Jason Kilar announced in August a comprehensive reorganization that would consolidate its content divisions under Warner Bros. chief Ann Sarnoff. Between 5 percent and 7 percent of WarnerMedia's 25,000 employees are expected to be let go, according to a source familiar with the matter. That equates to as many as 1,750 employees.

"Today, we have arrived at a number of difficult decisions that are resulting in a smaller WarnerMedia team," Kilar wrote in a memo to staff obtained by THR.

The company has already seen several high-profile executive comings and goings since the reorg was first announced. WarnerMedia entertainment chairman Bob Greenblatt and TBS, TNT and TruTV president Kevin Reilly both exited in August. In October, Warner Bros. TV Group chairman Peter Roth announced that he would be leaving the company in early 2021. Channing Dungey will replace him in the role after a stint at Netflix.

Layoffs have been rolling through WarnerMedia since August. In Los Angeles County alone, Warner Bros. Entertainment cut 550 jobs, according to notices filed with the state of California in August that listed an effective date of Nov. 14. In September, meanwhile, the company shuttered CNN digital venture Great Big Story.

But more sizable cuts were expected as part of the reorganization, which is part of an effort at the company to reorient around newly launched streamer HBO Max. Kilar confirmed that cuts were coming in an Aug. 7 interview with THR. "Obviously there will be layoffs just given the nature of what we're doing here," he said at the time.

Among those let go Tuesday was Warner Bros. TV communications veteran Scott Rowe, who had been with the company for 27 years. Lisa Gregorian, who ran marketing for WBTV, announced her departure from the group Monday. A source says that though Sarnoff asked the 30-year company veteran to stay, Gregorian opted to leave in response to her department being gutted in the reorganization.

On the film side, Warner Bros. co-president of marketing JP Richards also received a pink slip, representing the highest-ranking person at the studio to lose a job. Jim Gallagher, who joined Warner Bros. last year in the newly created role of executive vp of marketing, animation and family, was laid off as well. The film division, which has been rocked by the coronavirus pandemic, scuttling release plans for the past several months, was otherwise not the hardest hit division at WarnerMedia.

When AT&T acquired the former Time Warner business for $85 billion in 2018, it assumed control over an unwieldy collection of content production and distribution arms that served as mini fiefdoms. Though the company has worked to streamline those units over the years, the launch of HBO Max in May has forced leadership to reconsider how its operations work together. The service, which combines programming from across the WarnerMedia content universe, had 28.7 million total subscribers but just 8.6 million activated users at the end of the third quarter. Combined, HBO and HBO Max have 38 million U.S. subscribers.

In his note to staff on Tuesday, Kilar acknowledged the uncertainty that has hung over the heads of many WarnerMedia employees since August. "While I anticipate that organizationally, things will settle down materially in the weeks and months to come (we’ve worked hard to make this a process with a beginning, middle and an end)," he wrote, "I don’t want to suggest that our future is static."

He addressed employees in a virtual town hall Wednesday afternoon.

Tatiana Siegel contributed to this report.

Nov. 11, 5:52 p.m. Updated with additional information about those laid off.