Hollywood Grapples With Mass Layoffs as the Biz Redefines Itself for Streaming Future

From VARIETY.COM

This is the winter of discontent for Hollywood workers, as no level of seniority has been spared from the wave of mass layoffs.

Warner Bros. has been shaken by two rounds of layoffs and a wholesale restructuring that have ushered out veterans with decades of service to the Hollywood studio.

NBCUniversal has rewired the structure of its TV content production and distribution operations, leading to hundreds of job cuts. ViacomCBS has periodically shed bodies by the dozens in the year since its two halves formally tied the knot again in December 2019. AMC Networks last week disclosed it will let go of 10% of its U. S. workforce, or about 100 staffers.

Discovery Inc., Sony Pictures and Lionsgate have also let sizable numbers of staffers go in 2020.

And Jeffrey Katzenberg and Meg Whitman’s short-form video streaming service Quibi shut down just six months after a much-ballyhooed launch last April, leaving thousands of executives jobless.

Layoffs are hard on any company. But the current round of downsizing among traditional entertainment giants is even more alarming for seasoned industry workers because the cuts reflect a momentous transition in the business needs at the major studio and network groups.

Market analysts see it as a painful but necessary byproduct of change.

“We’ve been saying that at some point the studios were going to have to rethink their business models, and now they’re actually doing it,” says Michael Nathanson, media analyst with MoffettNathanson. “I think these companies should have been planning this pivot earlier.”

Media conglomerates that are shifting focus to direct-to-consumer and subscription-based platforms need a different kind of programming, marketing, distribution and sales expertise than has been prized in the modern era. Warner Bros. has shocked the industry with the volume of high-ranking executive departures in a short period. When the head of film marketing and head of TV marketing and some of their key lieutenants depart, it’s an unmistakable signal from WarnerMedia and its parent company AT&T that the studio is planning to sell its wares to consumers in very different ways.

Jay Tucker, executive director of UCLA’s Center for Management of Enterprise in Media, Entertainment and Sports, sees the mass staff cuts as a byproduct of all the M&A in media in recent years. Companies have to make these mergers work by taking big swings to generate growth and keep pace with consumers as traditional cable and broadcast assets mature.

“We’re shifting to the era of personalization, where the consumer is at the center of the business model,” Tucker says. “This disruption is hitting every level of employee, and it is compounded by the perception that once you hit a certain number of years of experience, it’s harder to find the next opportunity.”

The upheaval comes as all of the major conglomerates are re-engineering operations to support pay and free streaming platforms designed to eventually serve global audiences. It’s expected that many media giants will see staffing levels in the U. S. drop while growing in international territories.

Executives with expertise in marketing and distribution have been hard hit at most studios because those disciplines are radically changing in the streaming epoch. Especially in pandemic conditions, WarnerMedia and its counterparts need data scientists more than they need film distribution experts.

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