Warner Bros. CEO Confirms Layoffs in Memo to Staff

Warner Bros. CEO Confirms Layoffs Memo

Warner Bros. Entertainment chairman and CEO Kevin Tsujihara has told Warner Bros. employees  that layoffs are coming at every level across the studio.

The cuts are coming in the wake of a failed bid by Rupert Murdoch’s News Corp. to buy parent Time Warner and amid disappointing box office performance.

Tsujihara did not disclose how many cuts will take place or which of the three divisions — films, TV and home entertainment — would be most impacted. He sent the memo out late Thursday afternoon, just as the studio’s “The Judge” was opening the Toronto Film Festival, following media reports this week of possible employee reductions.

Tsujihara did not disclose how soon the layoffs would come at the Burbank studio, which has about 8,000 employees and has been the most consistently successful among the Big Six studios in recent years. It’s been at or near the top of box office and set a record last year with $5.03 billion in worldwide grosses.

Warner Bros. is also regarded as the biggest studio in Hollywood in terms of number of releases, spending on films and first-look deals.

Studio parent Time Warner is under pressure from Wall Street to reduce costs in the wake of spurning Murdoch’s $80 billion takeover bid. The stock, which had jumped above $87 a share after the offer was unveiled on July 16, plummeted to $72 a share following the Aug. 5 withdrawal by Murdoch.

The stock closed Thursday at $77.23 and is up 16% for the year.

Time Warner’s Turner division, which includes CNN and TBS, began offering buyouts to between 500 and 600 of its U.S. employees last month. But Tsujihara’s memo made no mention of buyouts being offered to the studio employees and added that he wanted to “set the record straight” — apparently refuting recent reports that buyouts had started.

SEE ALSO: Michael Wright to Replace Stacey Snider at DreamWorks as CEO

In Time Warner’s most recent earnings report, Warner Bros. operating profit gained 29% to $234 million in the second quarter due to increases in home entertainment and TV (which includes “The Big Bang Theory,” “Shameless” and “Two and a Half Men”). Revenue declined 2.4% to $2.87 billion due to a decline in movie performance.

Warner Bros.’ current share of the domestic box office for 2014 is $1.08 billion, with about 15% of the market and in third place behind Fox and Disney. That’s far short of the pace of 2013, when it led the U.S. box office with $1.86 billion.

Warner Bros. saw impressive returns this year from “The Lego Movie” and “Godzilla,” shared with now-departed Legendary Entertainment.

But “300: Rise of an Empire” and “Edge of Tomorrow” performed only moderately and Johnny Depp’s “Transcendence,” financed by Alcon, was a major disappointment. Additonally, the Wachowskis’ costly “Jupiter Ascending” was yanked out of its July slot less than two months before its opening in order to spend more time on special effects.

Here’s the memo:

I wanted you to hear directly from me about our plans for the Studio. In recent days, we have started to hear rumors here at the company and to read misinformation in the press, so I’d like to set the record straight. I know that the hard work and dedication of every employee around the world is the key to Warner Bros.’ success, and I am sorry for the distraction this situation brings to the workplace.

At Warner Bros., we work with the world’s most extraordinary storytellers, and our focus has always been to provide the creative environment and financial resources they need to realize their vision.  Our commitment to that won’t change. In fact, we’re investing more than ever in our film and television productions.

Since I became CEO, I’ve been working with the Studio’s senior management team to create a plan to position Warner Bros. for future growth, maintaining our position as the industry’s leader in quality and scale—all while safeguarding our traditions and legacy. This will require us to reduce costs and reallocate resources to our high-growth businesses.

Here at Warner Bros., we are currently in a position of unparalleled strength. To maintain this position, we are constantly reviewing our global businesses to make sure we’re operating as efficiently and effectively as possible. We are doing our best to minimize staff reductions. However, and it pains me to say this, positions will be eliminated—at every level—across the Studio. In making these decisions, we will follow all applicable protocols.  Your divisional and departmental leadership will share more information with you about these changes in the months ahead.

Despite the challenges we face, we need to focus on the tasks at hand, maintain the sense of excellence that has defined our company for more than 90 years, and move forward knowing that, regardless of any organizational changes, we will remain the industry’s gold standard.

Thank you, again, for your support and dedication to this company.

Warm regards,

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  1. john says:

    Ya got that? Ignore everything I just said about eliminating your job and “focus on the tasks at hand.” There will be plenty of time to think about your future after I hand you a pink skip. (What an idiotic, tone-deaf memo.)

  2. Why pay for milk when cow is free? says:

    No surprise here. I can get all the violence I want watching CIA-produced beheading videos on the Internet for free. I can see all the a$$es and b00bies of the sk@nk starlets on the Internet for free. Why should I pay for it in the theaters?

  3. Word to the Unwise says:

    CEOs better do some market research on “The Boycott” that is going viral in America. People’s income is minimal, gone or threatened. People are angry. People are VOTING with their pocketbooks. People are boycotting spending on anything not absolutely necessary. Boycotting spending is the new politics since our economic system is a government run propaganda war machine. Maybe your screen writers can write the script for this plot?

  4. Tired of cr@p says:

    CGI Sucks. As soon as I see CGI, I say forget about it.

  5. Tired of cr@p says:

    So how’s that Illuminati thing working out?

  6. bpster says:

    Hmm so all those hollywood people that had their head up obama butt are now losing their jobs? Let me see if I feel any sympathy…….NONE

  7. jnsesq says:

    Since when does propaganda not pay?

  8. WillOfThePeople says:

    Profit motive. Unpatriotic. Off with their heads! Occupy a theater!

  9. USMC1969 says:

    Why doesn’t Hollywood buy TIme Warner? They are quite wealthy and could afford it and keep people employed!

  10. CR says:

    Let’s hope he takes a reduction in his salary. I know many good people at Warner Bros. They are the best studio in this town. This saddens me. So again, if there is gonna be a staff reduction, I hope he gives in on his BIG wages!

  11. 4juices says:

    Dear Hollywood,
    Consider changing your greedy system. 1. go back to double features. 2. Why should I pay the same price for a so so movie as a great one? Not all cars are Teslas and not all movies are all that great. – Those changes would be a good start. Meanwhile I’m perfectly happy with free videos and books at the library until the prices come back to earth.

  12. Climp Jones says:

    sounds like the speech Custer gave right before Little Big Horn

  13. grannysue says:

    Hollywood has hollered from the rooftops how wonderful liberal policies are and how great Obama is. Goes to show you they must lack a sound education. You can’t make money when one hundred million Americans are out of work and when you lambast all conservative values as evil. Hello, over half of Americans are conservatives.

  14. softnut says:

    We pay $19 and $10 pop corn here in new zealand and our dollar is worth less than a yankee dollar and how food prices are way higher than any western country so it’s daylight robbery here – even worse than america

    • Al Kirby says:

      I’d still like to visit New Zealand. There’s not many other countries in the world that I wish to visit, but I’ve heard a trip to New Zealand is worth every penny.

  15. MichMike says:

    This article must be a lie. These are big liberal policy supporters and we know that true liberal policy believers NEVER lay people off, they just absorb the cost. Right?

    • softnut says:

      stop targeting Jews you narrow minded racist. jews are not a race. there are good blacks and bad blacks, good whites and bad whites but we don’t paint all blacks as bad aye

  16. stuball says:

    Bye, bye, Hollywood. Consolidate to New York.

  17. Paul says:

    It`s a bad joke.
    Virtual actors are far more costly to create even.
    Not to mention that their best creators will become huge stars demanding higher salaries. No run.

    • Guyver says:

      Nice try.
      Fail.
      Statement one is not true, and you know it.
      And as the technology gets better, the costs will come down even more.
      And as far as statement two, computer geeks are a dime a dozen, and they tend to be extremely dedicated to their work, not to their egos.
      They create for the joy of creating, not for their egos.
      They know they can be replaced if they let their egos and their mouths outrun their common sense.
      They will make good money, but not even close to the ridiculous amounts of money that live actors make.

  18. Auntie obama says:

    Suggestion. Do a hate movie about conservatives that don’t pay taxes. You can go to Canada and get a tax break on doing the film and the studio wont have to pay taxes. There you go, a suggestion that follows the liberal style.

  19. Ceos ans upper management are sucking the life out of most corporations with their pay and bene packages.

    • MichMike says:

      Yes, were McDonald’s to pay their CEO NOTHING, no benefits, no pay, nothing, the workers would receive a nearly 1.5 CENT / hour raise. Since few of them work 40 hours / week, DIRECTLY due to federal regulations, laws, and policies, that would amount to about $ 30.00 / year. Maybe you would call that a start?

  20. Juan Garcia says:

    Just like any liberal run company, it is doomed to fail.

  21. Todd Clemmer says:

    Finally. Some good news.

  22. JoeMcG says:

    Wall Street is complaining about the stock plummeting from $87 to $72? Where was the Street two years ago (not to mention the previous 10 years) when the stock was stuck at an undervalued $34? After all those years of poor performance, the stock finally starts reflecting the company’s value. Then Rupert steps in with his deal… is anyone surprised that the stock would spike? Then the Street gets upset when it settles down after Rupert pulls out? Greedy pigs! I say again, where were they years ago when even Harry Potter couldn’t work enough magic to raise the stock out of the toilet?

  23. Reuben Herrera says:

    Keep in mind these things are cyclic.

  24. Reuben Herrera says:

    Ya see, I predicted this early on…

  25. WTF Guy says:

    This comments section has been “Drudged”. Pointless to read them.

  26. Bitsy says:

    Maybe they could cut back on those rediculous salaries actors make things could work out. People not worth that much money.

  27. getby says:

    Economy in the toilet, no extra money for entertainment. Join Obama’s unemployment class

  28. ss says:

    yep , im sorry we only made $5 billion dollars last year, not enough to make this company run. so we will have to start letting people go. by the way, me ,CEO Kevin Tsujihara, my job, and salary, are safe, and i will not lose a dime of pay.

  29. Danny G. says:

    YAWN—I haven’t been to the movies in a very long time and each time a see previews to an interesting movie, the CG turns me off, so I end up not going to see it. Then I hear all these lefties Hollywood types condemning a conservative for doing the same things a liberal does, um, can you say hypocrites? Their silence, when they should be screaming, just boggles the mind. I think it’s safe to say, that for me at least, I couldn’t give a rats behind what the studios do. I’ve even quit watching TV since everything now is “Reality TV”, scripted reality is not for me and the drama they display is disappointing. However, I will say that the “Nature” programs I watch are always entertaining.

  30. Will the Entertainment chairman and CEO Kevin Tsujihara take a pay cut to uphold that “tradition and legacy”; question is…will Kevin or any Warner executive, outside contractor, et al. take one for the team? Doubt it.

    • Piggly Winks says:

      I know.. I saw that -all levels- comment and laughed because we know senior management won’t be effected. Oh sure, one might get “shuffled” around but will still earn his salary.

  31. Media Matters tosses in its two cents by pretending to be a conservative – this is a Media Matters plant!

  32. Bad Idea says:

    Hey, maybe going with Murdoch wouldn’t have been such a bad idea afterall.

    • Al Kirby says:

      It WAS a good deal, but, remember the political beliefs of these CEOS, particularly Comcast and Time Warner.

      Had it been George Clooney, they would have celebrated the deal with The Leftist Mambo.

      It was all about politics, nothing more, nothing less.

  33. No surprise – Hollywood has a different culture than the culture for which it attempts to make films. So what happens is that it makes bomb after bomb every time it makes a film other than a cartoon or a cartoonish superhero movie.

    In short, Hollywood sacrifices money for ideology, as if promoting a leftist ideology is more important than making money. It’s why all of those war films bombed – they were uniformly anti-American. Why would anyone want to see that.

    The surprise is that Sony and other corporate giants tolerate it – no idea why they would trade money for ideology – maybe no one is minding the store?

  34. Liberal Suckit says:

    in 3-2-1 mr community organizer we need a bailout. Remember all that support we gave you. Embrace the suck hollywood

  35. stinkin says:

    Well, it’s not enough, but it’s a good start. You cant go broke soon enough.

    • You gotta wonder about the foolish people at Hollywood – would Ford dis Republicans? Yet that is what Hollywood does every day – it shows its contempt for the very people it wants in its theaters!

      It’s why they can’t go broke fast enough, Good riddance – another American industry driven into the ground by bad management!

  36. chumlee says:

    In a related story, Warner Bros now hiring Spanish Translators.

  37. Miguel525 says:

    Hollywood, please understand, “We hate you more than you can ever understand!”

  38. alan says:

    GREEDY LIBERAL. How dare he he fire people to save money? Damn liberals so worried about profits instead of people.

  39. ImJustAGuy says:

    Liberals would rather be laid off than to work for the hated Rupert Murdoch.

    Schadenfreude!

  40. Charles Watson says:

    It’s no wonder. Hollywood has fallen into a lets write a check for SHIT SCRIPTS. I haven’t been to see anything in a year. I constantly wonder, who was dumb enough to write a check when I look at the videos in the store.

  41. Betty says:

    At Warner Bros., we work with the world’s most extraordinary storytellers, and our focus has always been to provide the creative environment and financial resources they need to realize their vision. Our commitment to that won’t change.

    Maybe if you did change, these layoffs might not be needed. If you have the world’s most extraordinary storytellers, than Hollywood is in a world of hurt because I am sure all of the studio heads say the exact same thing.

    They are not extraordinary, they are extra ordinary. Remakes do not require imagination.

  42. Raul Jimenez says:

    What is bad for leftist pro Obama Hollywood is good for America

  43. Joe E in the IE says:

    They could have been packing theaters to capacity if they didn’t ignore the endless all-you-can-eat buffet of movie-ready scandals served up by the current administration.

  44. Me says:

    “In Time Warner’s most recent earnings report, Warner Bros. operating profit gained 29% to $234 million in the second quarter due to increases in home entertainment and TV. Revenue declined 2.4% to $2.87 billion due to a decline in movie performance.”

    The above isn’t clear …

    Revenue = Total incoming money from sales and people buying your product.
    Profit = Dollars left after subtracting out costs to generate the revenue.

    Example: You buy a widget from a company for $10 (revenue). However, it cost the company $9 to make the widget. The company therefore makes $1 in profit. If fewer people buy widgets, the only way profits can go up is if the company finds a way to make the widget for less. They can do this in a number of ways, but usually by laying people off, paying them less and cutting benefits, but continue to make the same quantity of widgets..

    In Warner Bros case, the ONLY way profits can increase (29%) if revenue or sales decreases (2.4%) is if the company gets more efficient and creates the same amount of product/services for less money. Also called “trimming the fat”.

    So here’s the question: How are they putting 29% more money in their pockets (profits) if they sold 2.9% less product (revenue)? Answer: They have already laid people off, are paying them less, and/or reduced benefits, and have been doing the same amount of work for less.

    • D says:

      You missed it. The decline in movies performance is what drove the decline in revenue (which overall was down roughly 2.5%). The operating profit increase is due to the increased revenues from TV and Home Ent (the COGS for those are far less than those for a theatrical release). They key word in the piece you quoted is OPERATING…not overall profit

  45. Hopsaregood says:

    LOL

  46. Hopsaregood says:

    Film losing business is not a bad thing to me. So many movies are trash filled hate films basically. The bogus two faced mentality of not only the studios but actors also is a big part of their financial problem. Mostly left wing neo-communists in Hollywood. No loss if it goes totally under.

  47. I hate Hollyweird says:

    This is wonderful news!!!!

    I don’t even watch their movies for free after receiving RedBox offers by text on my phone which I seem to receive every two weeks.

  48. CycloneOz says:

    To the HollyWeird:

    You voted for this joke Administration. You voted for your state government.

    Now…wallow!

  49. CycloneOz says:

    This is what happens when you destroy an economy. People cut back. Unfortunately for the movie industry, their customers are “the little guy.” The 1% do not go to movies.

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