AT&T's WarnerMedia began layoffs Tuesday as the company formerly known as Time Warner restructures around streaming video.
The job cuts are part of AT&T's plan to eliminate redundant positions within WarnerMedia and refocus the company around growing HBO Max, the company's flagship streaming video service. Many of the top executives at Time Warner's HBO, Turner and Warner Bros. production studio have already departed before Tuesday's announcement, including ex-HBO chief Richard Plepler, ex-Turner President David Levy and ex-Warner Bros. Entertainment CEO and Chairman Kevin Tsujihara.
WarnerMedia CEO Jason Kilar, who took the job earlier this year after running Hulu from 2007 to 2013, has been evaluating the company and working to break down old Time Warner silos, along with AT&T CEO John Stankey. Stankey was WarnerMedia's CEO before rising to AT&T's top job and passing on his role to Kilar.
A WarnerMedia spokesman declined to comment on the exact number of layoffs, though a person familiar with the matter said it was more than 1,000 and possibly in the thousands. AT&T's stock was up 1.9% after the news but was trading near a five-year low.
The wireless carrier spent $67 billion on DirecTV five years ago and is now considering final bids for a minority stake sale in the company's broader pay-TV business at a valuation near $15 billion. AT&T paid more than $100 billion for Time Warner in a deal that closed in 2018.
Here's Kilar's full memo, obtained by CNBC:
This is a very painful email to write. And for a number of you reading this, I realize it will be even more painful to receive. For this, I am sorry.
In August, I first shared news about how we were going to meaningfully change the organizational structure of WarnerMedia (which entailed, among other items, simplifying how we organize our entertainment studios, elevating HBO Max, and consolidating our commercial activities into one organization). Many of you have patiently waited to hear how the reorganization would affect you personally, which is both uncomfortable and stressful. Reducing this period of uncertainty was one of the many reasons we pushed so hard to get through this work as quickly and as thoughtfully as possible, although it probably didn't feel fast enough. I want to thank you all for continuing to contribute your best, despite this challenging period and the additional pressure of everything else that has been going on in the world.
I've previously shared how critical it is for us to evolve how we operate in the context of best serving customers. As I mentioned a few months ago, this entails simplifying how we are organized, partnering with the very best storytellers, and leaning into world class product and technology as we share our stories directly with audiences across the globe. Our journey entails continuing to excel in our large, core businesses while at the same time investing in emerging businesses where we have the opportunity to meaningfully delight customers.
Today, we have arrived at a number of difficult decisions that are resulting in a smaller WarnerMedia team. This is a function of removing layers and the impact of consolidating previously separate organizations. Starting today in North America, we will be sharing which jobs are being eliminated and which roles have changed. We are continuing to review proposed changes in other countries across our non-US businesses, the timing of which will vary according to local regulatory requirements. Nothing about this is easy. But please know, these reductions are not in any way a reflection of the quality of the team members impacted, nor their work. It is simply a function of the changes I believe we must make in order to best serve customers. For those impacted, we will be offering severance and healthcare packages, in addition to professional services and team member assistance programs.
While I anticipate that organizationally, things will settle down materially in the weeks and months to come (we've worked hard to make this a process with a beginning, middle and an end), I don't want to suggest that our future is static. Rather, our future is about inventing ever better ways to move the world through story … which entails embracing change. I have every confidence in this world class team to do just that.
To our colleagues who are leaving, I wish there were words to lessen today's pain. Your contributions are a permanent part of this great company and today's news does not change that. I am extremely thankful for all that you have done for this team and this mission. I hope that at some point you will look back on all of it with immense pride.
Until then, please stay well and safe.
Disclosure: NBCUniversal is the parent company of CNBC.