WarnerMedia is merging with Discovery, and the companies expect the deal to be finalized in the middle of next year. They also anticipate that this merger will result in an annual cost savings of $3 billion. That usually means layoffs are coming.
WarnerMedia already went through several rounds of deep staff cuts after AT&T’s purchase of the company in 2018 as John Stankey, who led the unit for a time, slimmed down the operations. Executives and managers were let go as he combined HBO, Warner Bros., CNN and the other cable networks under a single management team.
When Jason Kilar came aboard last year, he cut further. Over 2,000 employees were laid off in the process. Now we’re seeing reports that Discovery CFO Gunnar Wiedenfels is looking at more “cost-cutting synergies“:
“There’s so much structure efficiency potential in the combination that we can afford to make those content investments and get to a much more beneficial financial profile,” Wiedenfels told the virtual Evercore ISI Inaugural TMT Conference during a session that was webcast.
With the Discovery financial chief set to play a key role in the critical integration of the Discovery and WarnerMedia units, Wiedenfels was asked how both companies can best capture value creation from their mega-merger. The companies expect $3 billion in cost-saving synergies after two years.
To realize $3 billion in cost savings will inevitably mean more layoffs — at both WarnerMedia and Discovery. David Zaslav, the executive who will run the combined companies if the merger is approved, said there was “a treasure trove of talent” at WarnerMedia, and emphasized the fact that Discovery doesn’t make scripted shows. So which Warner companies will get gutted with layoffs first? Will it be DC Comics? Cartoon Network? Rooster Teeth? All of the above?
Clownfish TV thinks it will probably be all of the above…