Warner Bros. Discovery plans major restructuring months after merger
David Zaslav continues to cut.
The CEO of Warner Brothers Discovery is planning a major restructuring just months after the formal completion of the merger that produced the media and programming giant, people with direct knowledge of the matter have said.
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In the company’s first earnings call since becoming a combined entity, Zaslav will announce the combination of its streaming platforms, HBO Max and Discovery+, these people say. These people add that the move would result in significant cost reductions, including reductions in management levels, marketing teams, and technology layoffs, leading to significant layoffs.
Fox Business first reported Wednesday that the restructuring and workforce reductions were likely underway and could be announced during the company’s earnings call Thursday at 4:30 p.m. EDT. Shares of Warner Brothers Discovery, which trade under the symbol WBD, soared in the Fox Business report.
A spokesperson for Warner Brothers Discovery declined to comment.
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Zaslav and his management team likely won’t announce any specific headcount reductions on the call, but those people add that the reductions will likely start happening within the next two months.
In the wake of the $43 billion Warner Media-Discovery merger, Zaslav, a seasoned media executive, found himself at the helm of one of the world’s largest media and programming conglomerates, which combines well-known brands such as HBO, the CNN cable news network and Warner Bros. Entertainment.
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But the deal left the company with large debts – around $14 billion. Its stock has floundered lately amid an economic downturn and fierce competition between various streaming platforms from rivals such as Disney and Comcast.
Zaslav promised investors and analysts that he would seek to save $3 billion by combining the units’ various operations. Its first big cost-saving measure was to eliminate CNN+, the cable news network’s ill-fated streaming service that shut down just weeks after launching earlier this year. Fox Business first reported CNN+’s pending cuts.
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It’s unclear whether Zaslav would make any formal management changes alongside the restructuring of the streaming platforms, according to people familiar with the matter. HBO chief content officer Casey Bloys is expected to play a key role in the new combined streaming team. He recently received a new five-year contract. “Casey is locked in,” said a person with knowledge of Zaslav’s management restructuring.
It is not known if Zaslav will reveal the name of the new streaming platform during the announcement.