Deadline: Warner Bros Discovery Begins Buyouts As First Step Toward Trimming Ad Sales Force By Up To 30%

Story from Deadline:

Warner Bros Discovery, two months after closing its $43 billion merger, has taken the first step toward reducing its global workforce, initiating voluntary buyouts in its U.S. advertising sales division.

Over time, the cuts will see up to 30% fewer employees in sales, an expected move reflecting overlap related to the business combination, a person familiar with the employee reductions told Deadline. The Information had the first report of the job cuts.

The timeline for the cuts is not completely clear, according to the source, but plans call for voluntary buyouts to be followed by non-voluntary measures including layoffs.

Sales is one area considered to have duplicative positions in its org chart given the expanded portfolio. Others include marketing and distribution as well as administrative departments like business affairs and accounting.

The newly combined company has promised Wall Street at least $3 billion in cost savings from the merger, which saw Discovery join with WarnerMedia in a spinoff from former parent AT&T. David Zaslav, the merged company’s CEO, and CFO Gunnar Wiedenfels have both given clear messages over recent months as to their intent to identify places where expenses can be cut and operations streamlined. Warner and Discovery combined operate a large array of cable networks both in the U.S. and internationally.

Warner Bros Discovery has about 3,000 workers in sales, half of them based in the U.S.

Employees whose tenures date back to the pre-AT&T days of Time Warner are working for their third corporate bosses in four years. The $85 billion AT&T-Time Warner deal resulted in the exits of about 1,500 employees, including high-profile, long-tenured ones like former HBO CEO Richard Plepler and Turner Sports chief David Levy. Buyouts also saw waves of Turner, Warner Bros and HBO vets head out the door. It is too early to tell the nature of the reductions but the $3 billion cost savings target is well north of the one heading into the prior combination.

Some in the Discovery ranks also went through a similar merger-related streamlining in 2018 after the company bought Scripps Networks Interactive. Jon Steinlauf, who is now head of sales for WBD, was among a small number of former Scripps execs to stay on in senior roles at Discovery after that merger.

Given that the news surfaced after the close of the trading day, it has yet to be seen how the stock market will react. While it has been a tough spring for almost all media and tech stocks, investors lately have seemed particularly immune to the charms of WBD, whose shares have lost nearly half their value since the merger closed in April. They finished today’s trading day at $13.98, down a fraction.