Richard Plepler and Michael Lombardo TCA - H 2013
AP ImagesTime Warner’s HBO is expected to lay off around 7 percent of the company’s 2,400 staffers this week, or roughly 168 people, a source confirmed Tuesday to The Hollywood Reporter.
It wasn’t immediately clear which departments and operations would be hit by the job cuts or by how much they would reduce annual costs for HBO, which analysts have called a big growth driver and the “crown jewel” of Time Warner.
Time Warner is in the midst of company-wide layoffs that have included the elimination of positions at Turner Broadcasting, including CNN, and Warner Bros. Management previously didn’t confirm that HBO would reduce its workforce but also didn’t rule out cuts. Wall Street observers in first reactions said the HBO cost savings fit in with cuts elsewhere at the entertainment conglomerate.
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Time Warner CEO Jeff Bewkes and his team have focused on continuing their record of profit growth, with investors in particular looking for solid growth after the Time Warner board rejected an $80 billion takeover offer this summer from Rupert Murdoch‘s 21st Century Fox, which then formally withdrew the bid.
Turner is looking to trim 10 percent of its workforce, or 1,500 positions, with some of the departures coming through voluntary buyouts. Turner posted a 10 percent gain in operating income in 2013, but revenue there dropped 5 percent, lagging a gain of 4 percent for all of Time Warner.
Meanwhile, Warner Bros. is looking to cut $200 million from its annual budget, CEO Kevin Tsujihara said at Time Warner’s recent investor day, after the studio had box-office disappointments this summer and posted just a 7 percent increase in operating income in 2013, compared with a 12 percent gain for Time Warner overall.
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Management has said the cuts will help its profitability and free up financial resources for increased content investment.
At Time Warner’s investment day, Bewkes said the company would more than double its earnings over the next several years and touted upside potential from increased content investment.
Time Warner declined to comment on the HBO layoffs. HBO couldn’t immediately be reached for comment.
