Due to the COVID-19 pandemic, the media and entertainment business is losing revenue from movie tickets, cable subscriptions, and television ads. Telecom giant AT&T Inc’s (NYSE:T) subsidiary WarnerMedia LLC is the latest in the sector to consider layoffs as a cost-cutting measure, according to the Wall Street Journal.
Time Warner Inc. was renamed WarnerMedia after AT&T's acquisition in 2018.
What Happened: WarnerMedia’s restructuring plans could kick off sometime in the coming weeks and the layoffs would take place across Warner Bros Studios and other subsidiaries like HBO, TNT, and TBS, as per the Journal. The company is reportedly targeting a 20% cost reduction with the restructuring.
“Like the rest of the entertainment industry, we have not been immune to the significant impact of the pandemic,” a WarnerMedia spokesperson told the Journal. “We are in the midst of that process and it will involve increased investments in priority areas and, unfortunately, reductions in others.”
Why Does It Matter: WarnerMedia’s industry peers have also resorted to job cuts. In September, an internal memo from Walt Disney Co (NYSE:DIS) disclosed the company’s plans to reduce its workforce by 28,000, an event termed as a “difficult decision” by Disney’s Head of Parks Josh D’Amaro.
In August, Comcast Corporation (NASDAQ:CMCSA)-owned NBC Universal disclosed plans to reduce its headcount by 10%, focused on sports and cable channels, theme parks, broadcast networks, and a movie studio, CNBC reported.
Price Action: After a 0.66% drop during regular trading hours, AT&T shares gained 0.28% in the after-hours session at $28.69.
Photo courtesy: LiAnG via Flickr