Just a few days after it was reported that many members of the WarnerMedia leadership are leaving including HBO CEO John Stankey and WarnerMedia CEO Kevin Tsujhara are leaving layoffs are on the way. Today CNBC reports that “significant” layoffs are expected at WarnerMedia.
MORE: As part of its restructuring, sources tell Dow Jones that “significant” layoffs are expected at AT&T’s WarnerMedia. https://t.co/BY24DOK8w9
— CNBC Now (@CNBCnow) March 4, 2019
According to AT&T WarnerMedia will consolidate the different media groups into a single organization. In a statement on their website, AT&T said: “Warner Bros.’ film, television, and games operations will add a new Global Kids & Young Adults business that brings together the family, kids and animation efforts from across WarnerMedia, including Cartoon Network, Adult Swim and Boomerang. Additionally, Otter Media, Turner Classic Movies and all activities around licensed consumer products development for WarnerMedia properties will also reside here. Kevin Tsujihara will spearhead these efforts and continue to lead Warner Bros. which, under his direction, has become the only studio with premiere positions in television, film and video games.”
Over the last few years, AT&T has quickly been buying media companies with DIRECTV and Time Warner being two of the largest purchases. Now AT&T is starting 2019 with $180 billion of debt according to reports. It is very possible that AT&T is hoping to cut down on that debt by laying off some staff.
To help cut back on costs and their debt recently AT&T closed on a deal to sell their data center colocation operations and assets to Brookfield Infrastructure. This move is likely an effort to help pay off some of their debt.
AT&T is also looking at selling its share of Hulu. When AT&T purchased Time Warner, it came with 10% stake in Hulu. It is reported that this 10% share may be worth as much as $930 million. While that is only a fraction of AT&T’s debt load, getting $900 million from Disney would help them pay off their debt.
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