Warner Bros Cut 800 Jobs

Warner Bros staff were advised of impending job cuts in a memo issued jointly by studio heads Barry Meyer and Alan Horn on Tuesday 20^th January 2009.   The notice said. ‘Based on the global economic situation and current business forecasts, the studio will have to make staff reductions in the coming weeks in order to control costs… This was a very difficult decision to make, and one that was not made easily.   Despite the fact that the company performed solidly in 2008, this decision reflects changes necessary for stability and growth going forward. The changing entertainment business landscape, shifting consumer demand and the overall state of the economy have affected companies around the world, and Warner Bros. is not immune to these factors.’   The memo went on to state that the move was a ‘last resort to help position the company for its future.’

 The cuts followed a number of cost-reduction measures by Warners in 2008, including the merger of New Line with the studio and the closure of Warner Independent Films and Picturehouse labels.   Despite these moves rumours of job cuts had been circulating for months.

 The studio expected to lay off 300 employees and to outsource a further 300 jobs in its management information systems and accounts payable services to IT Services and Business Consultancy company, Capgemini.   Approximately a third of the employees with outsourced positions were expected to be offered employment with Capgemini and to remain at Warner’s Burbank HQ.   200 open positions would remain unfilled.   Positions as high as executive vice-president level were expected to be axed according to corporate spokeswoman Sue Fleishman, and virtually every department would be affected.   The London Financial Times also reported that the studio was planning to move an unspecified number of jobs to India and Poland.

 Warner enjoyed a comparatively good year in 2008 thanks to the global success of The Dark Knight which grossed almost $1 billion worldwide, although profits from its success were shared with Legendary Pictures with whom Warner has a co-financing deal for 25 films.   However, the global recession had resulted in a decline in DVD sales – one of the industry’s key sources of revenue – and the sluggish performance of Blu-Ray, the latest development in home entertainment, left studios feeling insecure about future revenue.

 Output at Warner had declined from a peak of more than 40 releases a year to approximately 25 in 2008.

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 (Sources: Variety; Hollywood Reporter; Financial Times)

Further Reading:

2009

USA: 2009