Studio expects to eliminate nearly 800 jobs
Warner Bros. will cut nearly 800 jobs — or 10% of its worldwide staff — as it’s the latest studio to reduce employment in the wake of the economic downturn.
Studio toppers Barry Meyer and Alan Horn disclosed the cuts in a memo to employees Tuesday morning.
“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,” the execs said.
Stock of parent Time Warner Inc. declined 67¢ to $8.94 a share. The stock hit a 52-week low of $7 on Nov. 20.
The cuts had been rumored for several months, despite Warner’s cost-reduction moves last year at New Line, the shuttering of Picturehouse and Warner Independent and a relatively strong year at the box office, led by “The Dark Knight.”
Warners becomes the latest Hollywood major to belt-tighten amid predictions of a prolonged recession this year. Last year, Viacom, CBS, NBC Universal and Lionsgate made significant staff reductions.
The Meyer-Horn memo said the staff reductions and reorganization of operations were taken as a “last resort to help position the company for its future.”
The studio expects to eliminate 200 open positions, lay off 300 employees and outsource 300 jobs in its management information systems and accounts payable services to a third-party company, Capgemini. About a third of the employees with outsourced jobs will be offered employment with Capgemini and continue to be based at Warner’s Burbank headquarters.
“This was a very difficult decision to make, and one that was not made easily,” Meyer and Horn said. “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.”
A Warner Bros. spokesman said outsourcing of jobs will allow the studio to operate at a lower cost to help mitigate the possibility of further staff reductions.
Meyer and Horn said the specific information regarding cost-cutting measures, including staff reductions, will be disclosed by managers over the next few weeks.