According to Reuters News Agency, Warner Bros Discovery is planning to cut its ad sales workforce by 30%. It will result in thousands of people losing jobs.
The report states that Warner Bros Discovery has almost 3000 employees working on ad sales across the globe. And the company is now planning to cut back a large number of jobs.
WBD reportedly asked employees to voluntarily leave the organisation. Even though voluntarily at the moment, non-voluntary exits will soon begin with lay-offs.
Various reports suggest that the recent actions have connections with the merger between Warner Media and Discovery Inc. After the merger, there has been an increase in duplicative posts in the company. In departments such as sales, advertising, and marketing, duplication was reported. As duplicative posts create extra costs for the organisation, cutting those jobs will help the company reach the goal of cutting costs by 3 billion dollars faster.
In 2018, soon after AT&T closed an $85 billion deal with Time Warner, almost 1500 exited due to various reasons. Even individuals from the top level such as HBO CEO Richard Plepler and Turner Sports chief David Levy left the company.
Soon after the report got released, Warner Bros Discovery gained almost 2% value in pre-market on Wednesday.
Warner Bros Discovery, established in 2022 after the merger of Warner Media and Discovery Inc has been on an objective to cut costs in the organisation.
With nine primary business divisions, Warner Bros Discovery is one of the largest mass media & entertainment conglomerates in the world.
Gunnar Wiedenfels, Chief of Financial Affairs at the company, had said in April that the company is eyeing 3 billion dollars in cost savings.
Performance During Pandemic
During the pandemic, Warner Bros was able to maintain a good position in the market. Demand for entertainment and visual media skyrocketed during the lockdown period. Soon after the end of forced lockdowns around the world, the company started to face difficulties in maintaining growth in the number of subscribers.
In the first quarter of 2022, WBD posted a 15% growth in revenue. Revenue from Advertising and distribution led to this growth in revenue. However, subscribers to Discovery linear networks on March 31 were 4% lower versus the prior year.
David Zaslav, Chief Executive officer of Warner Bros Discovery, said, “With Warner Bros Discovery, we are creating a pure-play media company with diversified revenues and the most compelling IP ownership, franchises, and brand portfolio in our industry.”